The re-appointment of Jamie Dimon at JP Morgan has received quite a lot of attention in the U.K. on account of his continued unified role as chairman and chief executive.
According to a U.S. institutional-investor spokesperson interviewed on the BBC Radio 4 Today Programme Wednesday morning, the norm in the U.S. has been for such a unified role, although 40% of U.S. companies now have split roles.
In the U.K., a unified role is now quite exceptional and is contrary to good corporate governance practice. So it’s surprising that the U.S. corporate practice should be so slow to embrace the split role.
The unified role in many ways perpetuates the over powerful personality in charge at the top with no adequate checks or counterbalances. In other jurisdictions, that would now constitute a due diligence “red flag” or raise an adverse presumption that could potentially depreciate shareholder value.
Certainly, in terms of setting the correct “tone at the top,” the case for a split role would appear almost irrefutable. Accordingly, it’s surprising, given the U.S.’s draconian national and international anti-corruption legislation, that 60% of U.S. companies are still failing to embrace such a fundamental principle of good corporate governance and compliance.
That a compliance officer, perhaps faced with a potentially corrupt chief executive, should have no one at the top of the corporate structure to report governance or compliance concerns is quite unacceptable. Accordingly, shareholders and financiers should now insist on split roles in all U.S. listed companies.
Alistair Craig is a commercial barrister practicing in London.