Aurora Borealis
17 June 2020 Survey Report

The Case For Mandatory Separation of Chairperson And CEO In India

The conclusion calls for the separation of the CEO and Chairperson roles on Indian boards.

In conjunction with CFA Society India, we asked India members for their opinion on each of the three requirements of chairperson/CEO separation: (1) one person should not perform both roles, (2) the two should not be related, and (3) the chairperson should be a non-executive director (figure 1). We wanted to not only assess overall support for this separation but also uncover any nuances — for example, an investor may oppose one person performing a dual role but may not be concerned about an executive director performing the role of chairperson

The Case For Mandatory Separation of Chairperson And CEO In India Read the full report (PDF)


The survey was sent to CFA Society India members, who most likely had an informed opinion of the measure. We received 108 responses from the target population of 3,207 members, a response rate of 3.4%. The survey was sent on 10 February 2020 and closed on 21st February 2020.

Moving Forward

CFA Institute supports separating the roles of the CEO and the chairpersons on boards.

Board independence is a cornerstone of corporate governance, and separation of chairperson and CEO is a key component of this independence. According to our survey, the investment community in India has demonstrated strong support (92%) for a measure calling for separation of roles.

Transitions are never easy. We acknowledge that the Securities and Exchange Board of India’s (SEBI’s) decision to defer the rule was a prudent one, particularly considering the circumstances. The sound reasons for this rule remain, however, whether because of the dominance of family-owned firms, abuse of minority shareholders as evidenced in related-party transactions, or relatively weak legal protections for minority shareholders. We hope that SEBI stays the course and implements this measure in 2022 for the sake of strengthening India’s corporate governance.

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