|The Board establishes and sets out in writing the division of responsibilities between the Chairman and the CEO.|
There should not just be a separation of the positions of the Chairman and the CEO, but also a clear definition of their roles and responsibilities.
In general, the Chairman is responsible for creating the conditions for overall Board and individual director effectiveness, both inside and outside the boardroom. He is the face of the Board, and should ensure effective communication with shareholders and other stakeholders. Within the company, he should ensure appropriate relations within the Board, and between the Board and management, in particular, between the Board and the CEO.
The CEO is responsible for leading the Executive Directors (EDs) and the executive team in the day-to-day running of the company in accordance with the directions of the Board. He ensures the communication of key management decisions and recommendations to the Board.
To institutionalise this framework, the division of responsibilities should be clearly established, put down explicitly in writing, and agreed to by the Board.
B. Practice Guidance
C. Related Rules and Regulations
D. CG Guides
- Board Guide 2.5: Board Leadership [Board Composition].
- Board Guide 2.9: Independence [Board Composition].
- Board Guide Appendix 1J: “Comply or Explain” – Examples of Non-Compliance: 2. Separation of the Chairman and CEO [Corporate Governance].
- Board Guide Appendix 2F: Board and Board Committees’ Composition Requirements [Board Composition].
- Board Guide Appendix 6B-6: Balancing the Chairman-CEO Relationship [Board Relationships].
- NC Guide 4.2: Number of Independent Directors [Director Independence].
- NC Guide 4.6: The Lead Independent Director [Director Independence].
E. Related Articles
- “One and two-tier governance” by Willie Cheng. (446KB)
- “Compliance crucial for SGX-listed foreign firms” by Eugene Kang. (66KB)
- “The Role and Challenges of the Non-Executive Board Chair” by Lee Chong Kwee. (145KB)
- “State of directorship in Singapore?” by Adrian Chan. (3.4MB)
- “The Executive Board Chair: Boon or Bane?” by Wong Su Yen. (654KB)
- “Roles and Practices of Board Chairs Across the World” by Professor Stanislav Shekshnia and Veronika Zagieva. (387KB)