CEO/Chairman Role Duality Desire: Resistance to Separation Irrespective of Effect

Pre-19th-century notions of the governance of the enterprise were based on trust, namely that the stewards of the firm could be trusted to make best use of the assets of the organisation on behalf of the owners (Kakabadse and Kakabadse, 2008). At that time, governance processes were informal by nature but that soon changed. The birth of the joint stock corporation was accompanied by the registering of companies and the establishing of rules for corporate conduct, overseen by a body known as the Board. The reason for such stringency was the emergent misalignment between the interests of shareholders and that of the management (Shleifer and Vishay, 1997). In effect, the ‘manager’ agenda was viewed as differing from that of the shareholders (i.e. owners). In order to minimise such differences a number of actions have been taken tying managers’ actions tightly to shareholders’ goals through incentive-based mechanisms such as direct managerial share ownership (Jensen and Meckling, 1976) and the use of a variety of managerial remuneration schemes (Murphy, 1998). These levers have been central to Anglo-American (English) corporate governance practice (Roe, 2003: 1). Thus, the emergent purpose of corporate governance mechanisms has been to bring about greater alignment between owner (i.e. shareholders) and agent (i.e. managers).