Question

I'll rate answer both one question two part

A. What are the pros and cons of allowing the CEO of a company to also serve as the Chair of the Board? Please provide an example of a situation where this was positive or a situation where this was negative

B. Many companies have codes of ethics to guide managers in their decision making. However, the evidence indicates that few people rely on a company code of ethics in their decision making. Are the codes valuable? Should companies have a code of ethics?

Answer 1

A . Having the same person as the CEO and Chair of the Board has both pros and cons . Major decisions can be taken quickly as the process will get reduced of approaching different people for approval. Also work can be done faster and the power resides in a single hand. For example a bill on employee rights need to be approved, one person's approval is enough which is easier than making two persons agree on the single bill. But having the same person makes the decisions one sided or biased as there will not be any one to oppose and argue on the decisions. This is the major disadvantage as the decisions might lead the wrong path. For example , a deal is going to be signed which is very challenging. The staff knows that they cannot handle the challenge but the CEO is adamant on taking it. Nothing can be done as both CEO and the chair of board are the same.

B. Code of ethics represent the values and morals of a company and reflects on it's reputation. It is very important to have code of ethics and follow them . They help the managers in taking decisions in interest of the company . Managers must follow these ethics as they guide them in reaching the mission of the company and it is very important to have the company in a disciplined manner. Hence code of ethics are very important for any company and need to be followed.