Recent years have seen a push towards separating the roles of CEO and chairperson of the board. While many companies still maintain a combined CEO-chair role, investors consistently express their concern that the dual CEO-chair position jeopardizes the independence and effectiveness of the board. Yet, while investors and academic research have focused on one channel for achieving such separation through the appointment of an independent director as chair a second has been left relatively unexplored. In fact, in many cases, as this Article documents, the separation of CEO-chair has occurred through the second channel: the current CEO-chair steps down as CEO while remaining as the chair of the board, and a new CEO is appointed. This process is what this Article terms the "successor CEO" phenomenon. Acknowledging the significant number of companies with such a structure in corporate America raises several policy questions. What are the corporate governance and operational benefits and drawbacks that the successor CEO route presents? How should investors treat companies that have separated the the roles of CEO and chair, but have done so through the successor CEO route? This Article explores these questions, providing detailed data regarding these companies and the chairs of their boards. This Article finds that companies with a successor CEO structure often avoid the appointment of a lead independent director, and in some cases even declare their ex-CEO-chair as independent. In addition, their ex-CEO-chairs are longer tenured and older compared to other chairs, and companies often appoint their successors from within. Recognizing that companies with a successor CEO structure may pose specific governance concerns based on key findings regarding such a structure, this Article then offers several policy recommendations.
