Should the CEO also be chairman? More companies say no

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Ken Lewis’ ouster as chairman of Bank of America Corp. is part of an ongoing trend to split that post from the chief executive position -- a move many corporate governance experts have championed.

The percentage of companies in the Standard & Poor’s 500 index with an independent (non-CEO) chairman was as high as 39% last year, up from 16% in 1998, according to a recent study by the Millstein Center for Corporate Governance at Yale University.

What’s more, a rising number of companies are opting for a truly independent chairman -- meaning someone with no prior ties to the company (unlike, say, a former CEO).

By that measure, 16% of S&P 500 companies had an independent chairman last year, up from 7.6% in 2004, the Millstein study said.

A central idea in splitting the roles is to provide a check on the CEO’s power -- a way, in theory, to keep absolute power from corrupting absolutely.

‘The independent chair curbs conflicts of interest, promotes oversight of risk, manages the relationship between the board and CEO, serves as a conduit for regular communications with shareowners, and is a logical next step in the development of an independent board,’ the Millstein study says in its executive summary.

‘In the context of this economic crisis, boards should adopt independent chairmanship as an important voluntary and proactive element in restoring market trust’ in companies, the study said.

Yet shareholders don’t automatically embrace the idea. Even as Bank of America shareholders approved the proxy ballot measure to separate the roles, Morgan Stanley’s shareholders rejected a similar measure at their annual meeting today.

And Wells Fargo & Co. shareholders on Tuesday voted down a proposal that called for the chairmanship to go to an independent director. Former Wells CEO Richard Kovacevich now holds the chairman’s post.

For Lewis, facing a torrent of criticism over the bank’s recent performance under his watch, the split may be ominous: At crosstown rival Wachovia Corp., G. Kennedy Thompson was stripped of the chairman’s role in May 2008 -- and a month later the board ousted him as CEO as well.

BofA’s board, however, has continued to express its support for Lewis.

-- Tom Petruno