Separating the CEO and Board Chair Positions

UnitedHealth backtracks on separation and a shareholder group proposes renewed separation

Stephen Hemsley served as UnitedHealth’s CEO CEO from 2006 to 2017. After he stepped down as CEO in 217, he was appointed as chairman of the board of directors.

UnitedHealth has had serious problems of late, of course. In April of 2025, it announced a downward earnings revision. In May, it suspended its full-year outlook.

Add to this federal criminal and civil probes, the fallout from a cyberattack that breached data on 190 million Americans, and the murder of top executive Brian Thompson in December, which was followed by widespread consumer backlash over insurance denials.

Not surprisingly the stck price has taken a severe beating since April:

Heads were bound to roll.

Andrew Witty stepped down as CEO in May 2025. The board immediately brought Hemsley back as CEO effective, while allowing him to remain as board chair.

The company’s public statements cited “personal reasons” for Witty’s departure. But the announcement coincided with the suspension of its 2025 outlook, citing unanticipated medical cost pressures, which suggested a strained business environment, but the departure was not explicitly tied to operational failures in the public announcement.

John Rex, who had been CFO since about 2016, also was replaced. Wayne S. DeVeydt was appointed as the new CFO, effective September 2, 2025. The official press release framed this as part of a broader “leadership team” change. But Reuters article mentions that this change is part of continuing “management reshuffling aimed at addressing mounting challenges” facing the company.

Given all the turmoil, it’s hardly surprising the board wanted new top managers and an experienced hand back at the helm.

But.

UnitedHealth’s statement of corporate governance principles explicitly embraces separating the CEO and board chair positions:

The Board believes that the roles of the Chair and Chief Executive Officer should be separate as an aid in the Board’s oversight of management and to allow the Chief Executive Officer to focus primarily on management responsibilities.

As with the other principles set out therein, the independent chair provision is not binding:

The Board views these principles as guidelines—not rigid restraints—and believes they are evolutionary in nature.

According to Bloomberg, an activist shareholder—The Accountability Board—has criticized UnitedHealth’s failure to have Hemsley step down as chair after resuming his post as CEO. TAB is putting forward a shareholder proposal under SEC Rule 14a-8 to amend UnitedHealth’s bylaws to codify the requirement that the two positions be held by different persons.

According to Bloomberg, TAB’s proposal is framed as a request that the board amend the bylaws to effect the amendment. One therefore wonders why TAB did not simply offer up a proposal that would have amended the bylaws directly. But that is a question for another day.

Today’s question is the policy one; namely, is separating the CEO and board chair positions sound corporate governance practice?