BAH: Separating CEO and Chairman decreases shareholder value

Separating the roles of CEO and chairman of the board has become a popular objective in the U.S. among certain CG activists. A recent comprehensive study of the worlds 2.500 largests companies by Booz Allen Hamilton (S+B, June 2004) shows that splitting the roles of chief executive and chairman does not result in higher returns for shareholders. The norm in Europe for at least a decade, dividing the positions of CEO and chairman has become the G. movement’s cause célèbre in the U.S. But returns to investors are lower — 4.7 percentage points per year lower in Europe, and 4.1 percentage points lower in North America — when the roles are split.
BAH seems to conclude that there is a causal relation between splitting the roles of CEO and Chairman on one side and shareholder value creation on the other side. Do you agree? Or do you believe the fact that Europe is lagging in shareholder value creation is due to other reasons?