NYSE Board Approves Plan That May Split Top Job

The New York Stock Exchange on Wednesday said its newly installed board of directors voted in favor of sweeping changes to the exchange’s governance structure that might result in the roles of chairman and chief executive being split.

The board also voted to add a representative of individual investors to the exchange’s advisory committee.

The votes were central to NYSE interim Chairman John S. Reed’s task of reforming the exchange amid fallout from the Sept. 17 resignation of longtime chairman Richard Grasso and broad floor-trading investigations.

The NYSE said there had been no decision about whether the CEO and chairman should remain a combined position. But the wording in bylaw changes the NYSE released Wednesday suggested that it would be difficult, if not impossible, for the same individual to effectively hold both titles.

In one paragraph, the document says, “The chief executive officer shall be recused from deliberations of the board” as they pertain to every board committee, including key committees such as regulatory oversight and auditing.

In another paragraph, the document says, “if the chairman is also the chief executive officer, he or she shall not participate in executive sessions of the board.”

Some corporate governance experts advocate splitting the chairman and CEO roles to avoid a concentration of power.

The NYSE’s new eight-person board, which met for the first time Monday, also voted to add a representative of individual investors to its planned 20-to-25 member board of executives, an advisory committee. That committee will be composed of a “reasonably balanced” blend of people from various constituencies, the NYSE said.

The exchange did not say how the individual-investor representative might be chosen.