NEW YORK -- It didn't prevent scandal at Enron or WorldCom, but for shareholder advocates it's still as basic as separation of church and state: the chairman and chief executive should never be the same person.
Though some companies have heeded that call in the post-scandal era, it's clear where most of corporate America stands on the issue.
Nearly four out of five of the nation's biggest corporations still entrust the two posts to a single executive, a preference demonstrated most recently by The Coca-Cola Co., whose board of directors recently brushed aside a shareholder proposal to separate the roles and last week handed both titles to E. Neville Isdell.
Most such companies roundly reject arguments that a division of powers is fundamental to an effective system of checks and balances that protects against mismanagement or worse.
At the very least, some experts contend, it is inefficient to force the CEO to consult with a chairman who is not sitting in the trenches, immersed in the day-to-day realities of the business.
A bigger risk, goes the one-poobah refrain, is stifling the CEO's entrepreneurial juices - handcuffing him or her with the distraction of someone peering over their shoulders, potentially second-guessing their decisions.
No doubt, the type of hard-driving personalities who often make the best CEOs are also the sort of people who thrive on independence and crave total control.
But it's also a matter of vanity and simple resistance to change.
Since most U.S. companies are led by a single CEO and chairman, any top executive worth his or her pride would feel slighted to be denied the same distinction. And companies, anxious to attract the best talent to run their companies, would feel hard-pressed to explain why they can't bestow the same respect upon their CEOs.
As of March, the same person held the top two posts at 377 of the 500 companies in the Standard & Poor's 500-stock index, according to The Corporate Library, one of many governance watchdog organizations which advocate separation of the posts. That's a decrease of 17, or about 4 percent, from a year earlier.
The improvement also may be less impressive because 71 of the companies which divide the posts are chaired by their former chief executives. In many cases, these arrangements are only a temporary measure on the way to handing the CEO both titles. Either way, The Corporate Library and others find that relationship problematic because in many cases the former CEOs have worked closely with and even picked their successors. Those bonds may impede impartial oversight of a CEO out of friendship or embarrassment.
So how to break this self-perpetuating cycle of ego? Don't look to Coca-Cola for inspiration. In arguing against a shareholder proposal to divide the posts, the company's board offered this bit of circular logic:
"Currently, the majority of major U.S.-based companies are led by chief executives who also serve as Board Chair."
It's easy to see why, barring the type of shareholder revolt which recently led to the de-chairing of Disney CEO Michael Eisner, a board of directors might feel awkward about stripping away one title from an existing chairman and chief executive.
Likewise, had Coke succeeded in hiring James Kilts, who already holds the two top posts at Gillette, it might have been difficult to withhold the chairman's title.
But outgoing Coke chairman and CEO Douglas Daft was vacating both posts, an invitation for change.
And while the new leader, Isdell, is considered a very good catch, it's hard to imagine that an executive who's never run a company of such size and prominence would have turned down the job if he hadn't been named chairman.
If he had balked, perhaps it would have been in the interests of shareholders to find someone who didn't consider it a bum deal to be named CEO of the world's biggest soft drink company.
Unfortunately, in an environment where there's a perceived shortage of top-shelf corporate leaders, boards are afraid to lose out on a quality CEO candidate in the name of improved corporate governance.
"It is so hard. Right now, when you get a new CEO search, you take deep breath and say, 'Where am I going to find a great candidate?'," said Joie A. Gregor, a managing director at the executive search firm Heidrick & Struggles.
That fear helps explain why, instead of adopting outright change, many companies seem more inclined toward compromise. Notably, there are now 156 S&P 500 companies with a "lead" independent director on the board, an increase from only 22 a year earlier, according to The Corporate Library.