Amazon shareholders overwhelmingly voted down a proposal to require the company to keep the CEO and board chair roles separate. According to a recent filing, about 82% opposed the measure during the annual meeting on Wednesday. This proposal was one among eight independent proposals presented to shareholders, all of which were rejected.
Amazon split the roles of CEO and board chair in 2021 when founder Jeff Bezos handed over CEO duties to Andy Jassy. Bezos retained the executive chairman position as part of the leadership transition. The rejected proposal aimed to formally codify this split structure within Amazon, similar to most S&P 500 companies, arguing that this separation allows the board to focus on governance while the CEO manages business operations.
Rising Trend in Governance Proposals
The call for separating CEO and chair roles has gained momentum recently. The number of such shareholder proposals increased by 113% among Russell 3000 companies in the first half of 2023, the highest in a decade, according to Harvard Law School’s Forum on Corporate Governance.
Amazon urged shareholders to vote against the proposal, emphasizing that the existing leadership framework allows the board to tailor leadership decisions to the company’s evolving needs. The company stated the 2021 separation was the result of careful deliberation and that retaining flexibility in leadership roles serves shareholder interests best.
What The Author Thinks
Maintaining the ability to adapt leadership roles based on company needs is smarter than rigid mandates. While governance best practices are important, every company’s context differs. Amazon’s continued success suggests that allowing the board discretion in structuring leadership is the right call rather than imposing fixed separation.
