JPMorgan Chase Shareholders Lobbying for Change in Governance Structure

According to a recent article in the NY Times http://dealbook.nytimes.com/2013/04/05/behind-the-scenes-jpmorgan-works-to-sway-shareholders-on-dimon-vote/?ref=business, some of JPMorgan Chases’s major shareholders are considering proposing a change in the banking institution’s current leadership structure. The change would separate the positions of Chairman and Chief Executive Officer. Currently, Jamie Dimon holds both titles.

In the article Susanne Craig and Jessica Silver-Greenberg, its authors, note that JPMorgan’s board continues to support Mr. Dimon and would like him to retain both titles.

Separating the role of Chairman and CEO, though rare in the U.S., is not uprecedented. In fact, as the article points out, one of JPMorgan’s major rivals, Citigroup, separated the responsibilities of its Chairman and its CEO. And, rumor has it that not long after Citigroup rearranged its executive suite, the new Chairman convinced Citigroup’s Board to seek the CEO’s resignation.

Outside of the U.S. many jurisdictions have wholly separate structures for managing the operations of the organization and supervising the activities of corporate executives. For example, in Germany many public companies retain a two-tier leadership structure featuring a Management Board and a Supervisory Board. The Management Board is responsible for the business activities of the company and the Supervisory Board appoints the members of the Management Board and, along with the Management Board’s Chairman, oversees the activities of the Management Board.

Certainly, the U.S. corporate governance framework is a long way from adopting the German model. However, as in the case of Citigroup and, maybe at some future date, that of JPMorgan Chase, change might be coming.

Advertisements

About docjonz

I am an Associate Professor of accounting at Hofstra University in Hempstead, NY. Additionally, I have more than 30 years of professional accounting experience in various capacities including auditing, accounting standard setting and corporate accounting policy.
This entry was posted in Corporate Governance and tagged , , , . Bookmark the permalink.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s