Microsoft Elects Satya Nadella as Chairman

Posted on June 16, 2021 by Paul Thurrott in Microsoft with 25 Comments

Microsoft to Make "Tough Choices" as it Unveils New Mission Statement to Employees

The Microsoft board of directors has elected CEO Satya Nadella as its chairman, replacing John Thompson, who succeeded Bill Gates in 2014. Thompson was unanimously elected as lead independent director, a role Microsoft notes he held previously from 2012 to 2014.

“In this role, Nadella will lead the work to set the agenda for the board, leveraging his deep understanding of the business to elevate the right strategic opportunities and identify key risks and mitigation approaches for the board’s review,” Microsoft revealed. “As lead independent director, Thompson will retain significant authority including providing input on behalf of the independent directors on board agendas, calling meetings of the independent directors, setting agendas for executive sessions, and leading performance evaluations of the CEO.”

Mr. Nadella will, of course, retain his role as CEO as well. Microsoft stock has risen more than 600 percent during his tenure, and the software giant is now the second-largest company in the world.

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Comments (25)

25 responses to “Microsoft Elects Satya Nadella as Chairman”

  1. Avatar

    mikegalos

    Great choice. Satya's both a brilliant strategist and a really nice guy.

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      bkkcanuck

      The CEO of a large public company SHOULD NEVER be the chair of the board IMHO.

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        lvthunder

        I agree. The job of the board is to hold the leadership of the company accountable.

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        Greg Green

        After reading about GE and Sears I’ve lost faith with corporate boards.

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        behindmyscreen

        It sounds like the lead independent director has a lot of power over Nadela though. Not a typical board.

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          bkkcanuck

          In the end, a strong board holds the CEO and senior management team accountable to shareholders. It is in every companies interest to make sure that a strong board is put in place for governance. A good CEO will understand the need for a strong board, a poor one may attempt to weaken the board as they see them as a check on their power.

        • Avatar

          bkkcanuck

          Not at all, different functions. A CEO is still an employee and does not have complete freedom to do anything they want. A board has a fiduciary duty to the shareholders of the company. So the board does things like approve budgets, require justifications on major investments, M&A or expenditures etc. (can set limits to what a CEO can do before it requires board approval - i.e. small investments no board approval on individual investments). The board is responsible for approving bonus packages for CEOs and final approval on agreement if those targets were met during the year. In exceptional situations where the CEO gets himself into a conflict of interest (like a personal relationship with a Senior VP - that interferes with the reporting relationship) a board can take action to eliminate it in a matter seen fit (it could be mandating changing reporting relationship or more direct oversight). A board is responsible for broad policies and objectives, not day to day management.

          • Avatar

            mikegalos

            Exactly with one unstated qualification that got misinterpreted for many. The board has a fiduciary responsibility for the owners' (stockholders') investment overall. Many assume it means they're responsible for short-term stock price where it's really the overall health of the corporation.

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      miamimauler

      Lol, Mike thinks MS is right despite what is a clear conflict of interest.


      I'm shocked, shocked I tell you.

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      christianwilson

      I agree. I really came to respect him when I read his book, Hit Refresh. He knows how to make hard decisions for the business but has empathy, too.

  2. Avatar

    naro

    I think it's a good move. Microsoft is such a behemoth, nadella isn't turning it on a dime and doing anything crazy even if he has the power of both roles.

  3. Avatar

    jdawgnoonan

    Nadella was exactly who Microsoft needed as a CEO and I am happy that he is now the chairman as well. Microsoft desperately needed a visionary type leader and Nadella is that.

  4. Avatar

    ebraiter

    You mean Bill Gates is not Chairman & CEO? :-)

    How many tech novices I know still thinks Gates run the joint.... Half still blame Bill when something goes screwy. :-)

  5. Avatar

    wolters

    I love your choice of photos for Nadella...that is the look he made when he asked if Windows Phone was here to stay and he said "Absolutely." Mind you I am not one of "those" afraid to let go of Windows Phone but I remember that vividly from that interview...

  6. Avatar

    behindmyscreen

    To everyone saying there is a conflict....READ what the role of the Lead independent director is. He's responsible for reviews of Naddela as CEO.

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      Greg Green

      That’s also supposed to be the role of the board, including the chairman. Now the chairman oversees himself, and the ceo is overseen by himself.

  7. Avatar

    BigM72

    Agree with all the comments here that CEO and Chairman should be separate. I have feeling this is a way to smooth out succession planning. Get him into the chairmanship now and then any news about grooming the next generation leader for Microsoft won't rock the boat so much.

  8. Avatar

    John Craig

    CEO and chairman...conflicting roles. The chair is supposed to be independent and able to veto the CEO (and board) decisions if he deems them not in the interests of the wider company. Bit of a power grabby thing to do

    • Avatar

      jchampeau

      I'm in total agreement with the notion that the roles conflict. The board exists to represent the owners of the company (shareholders), and the CEO takes direction from the board and does (executes) what the owners ask them to do. But as a point of clarification: corporate board chairs don't have veto power.

  9. Avatar

    abdulla77

    There's pro's and cons for both models (separate or the same person as CEO and chairman) and there scenarios for success or failure (personally I favor a separate CEO and chairman). Yes, I do agree Microsoft's lucky to have a leader like Satya. He's seriously killing it as CEO of a tech company, makes others (Google) look way less.


    I'm more concerned of the elephant in the room Bill Gates situation.. I have a hard time separating Microsoft from Bill.. Microsoft needs a new refreshed purpose, a new identity.

  10. Avatar

    bkkcanuck

    The board should be a strong independent board that represents shareholders, having the CEO be the chair of the board sets up many conflicts of interest and a weak board at best.

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      taswinfan

      I would normally agree. But for some reason I get the feeling that Naddela has been calling the shots on both sides for a while now. He's as much interested in MS Stock as he is its products. In the end I think it comes down to having the right guy in the right seat at the right time. ... Can or should Nadella fill two seats instead of just ceo... I guess time will tell. But like I say I don't think this will be too much of a change for him in all fairness.

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