Introduction to Making Separation Work
Separating the two roles will just be successful if the two individuals concerned strike up a good working relationship. To exploit the probability of success, the board should appoint to the roles individuals whose personalities appear to mesh. The board should also hire two individuals with complementary skills and knowledge. This will assist to fill up any gaps and should help to build mutual respect between the chairman and chief executive.
The board of directors should attempt to describe the two roles and should make everyone attentive of the responsibilities and duties associated with each role. Defining these roles, however, is easier said than done. It is not possible for all situations to be covered. A number of overlaps are probable to take place and there is likely to be some doubt about who is responsible for specific tasks. This carries the inevitable danger of boundary disputes. In which the company operates in a extremely dynamic environment, new tasks are frequently emerging and so this will be a specific problem. In this condition, constant renegotiations of the 2 roles may have to take place. For any possibility of success, both parties have to be enters into any renegotiations along with mutual respect for abilities of each other and for the authority vested in each role.
To prevent misunderstanding and to create mutual trust, there should be often communications among the two parties. Significant information should be shared and there should be no 'surprises'.
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The AICPA sets usually accepted professional and technical standards for CPAs in several areas. The AICPA held a control in this field until the 1970’s.
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