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BOARD COMPOSITION: KNOWLEDGE VS INDEPENDENCEWhat is clear is that, on this issue, there are no hard and fast rules; companiesshould make their decision on the basis of their particular circumstances at thetime, and in the light of the personalities involved. An interesting case is that ofARM Holdings, which as a semiconductor company operates in an industry thatis at least as complex, though in a different way, as banking. When Sir RobinSaxby retired as chief executive in 2001 after 10 years in the job, he was madechairman, and he held that post until 2006. He was then succeeded by anoutsider, but one who was totally familiar with the semiconductor business. Thenew chairman, Doug Dunn, had worked in several semiconductor companies,and prior to joining ARM had been chief executive of ASML, a leading supplier oflithography machines to the semiconductor industry.Rather than blindly following the guidelines, companies need to bepragmatic, as Tesco has been in recent years. Ian MacLaurin (now LordMacLaurin) was one of a small group of individuals responsible for lifting Tescointo a position of leadership in the UK supermarket industry. He becamemanaging director in 1973 and chairman in 1985. When he retired in 1997, thenew chairman was an outsider, John Gardiner, who had been chief executive ofthe Laird Group. When Gardiner retired in 2004, the chairmanship passed toTesco’s finance director, David Reid. Last year Reid was succeeded by Sir RichardBroadbent, who had held senior posts in government and banking, but had nodirect retailing experience.But whether the choice falls on an If the chairman hasno experience of theinsider or an outsider, there is nobusiness, there is adoubt that getting the rightdanger that they willchairman in place is even morebecome a puppet inimportant than it was 10 or 15 years the hands of theago. This is reflected in the fact that chief executivethe term ‘non-executive chairman’has largely gone out of fashion. The chairman is not part of the managementteam, and is usually part-time, but the responsibilities – for example, dealingwith shareholders and with the government – have become much more onerous.This in turn raises a further problem: how to ensure that the higher profile ofthe chairman does not lead to conflict with the chief executive. A clear allocation49