TheCorporateCounsel.net

This blog from Gunster’s Bob Lamm zeroes in on a trend plaguing many companies these days: too many chiefs. As Bob points out, when too many people are responsible, nobody is accountable. Here’s an excerpt that explains why an expanding C-suite needs to be handled with care:

From a broader governance perspective, one would like to think that before a company creates some of the more unusual and/or duplicative chiefdoms above, the board or the comparable authority would have a clear understanding of where each chief’s responsibilities begin and end, and how the responsibilities of each relate to other chiefs’ areas.  However, my experience suggests that may not be the case, which means that accountability is difficult to determine both internally and externally.  Perhaps this isn’t a problem when things are going well, but when they’re not?

There are many other areas of concern to a nerd like me.  For example, which chiefs are deemed to be “executive officers” under SEC rules?  Are they also deemed Section 16 officers?  What’s the rationale for each?  (As an aside, it’s hard enough to explain to clients why someone who is an “executive officer”  may not be a “Section 16 officer,” or vice versa.  This plethora of chiefdoms doesn’t help.)  There seem to me to be compensation issues as well – are all chiefs created equal?  The answer must be “no,” because the traditional chiefs – the CEO, CFO, etc. – do not have identical compensation.  But how do you weigh compensation levels when presumably each chief oversees a significant area?

– Liz Dunshee