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What is difference between executive chairman and non-executive chairman?

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09/26/2014

An executive chairman is full time office holder who typically leads the board and also takes a hands-on role in the company's day-to-day management. Because of the dual role, some say there is a significant agency cost to having someone be the head of both the board of directors and executive officers. An imbalance of the "checks and balances" of corporate governance is thus created. A non executive chairman is a part time office holder who sits on and chairs the main board of a company, and also usually provides support and advice to a chief executive officer. This position usually entails fulfilling a similar function on a number of ancillary board committee, as well as being a political figurehead of the company.