Healthy Skepticism Library item: 11636

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Publication type: news

Clarke T.
Novartis has no plans to split CEO, chairman roles
Reuters 2007 Sep 28
http://www.reuters.com/article/health-SP/idUSN2820798120071001?pageNumber=1

Full text:

Daniel Vasella, the chairman and chief executive officer of Novartis AG, sees himself retaining both titles for the foreseeable future, even as other big European drugmakers move to split the roles.

“My thoughts on this are that in both models you see successes and failures and it would be a mistake to believe there is only one model for success,” he said in an interview at the launch in Boston of a new manufacturing research collaboration with the Massachusetts Institute of Technology.

Neither does Vasella plan to step down any time soon. At one time, he had spoken of 2008 or so as his departure date. But that, he says now, was based on a rule the company once had that directors should only serve for 12 years.

That rule was implemented because a majority of the board had been elected the same time and therefore would have been required to leave en masse, he said. It was abandoned a few years ago, Vasella said.

Vasella, who has been at the head of the Swiss drugmaker since 1996, when the company was formed through the merger of Ciba-Geigy and Sandoz, says he “still has lots of ideas and energy” and shareholders have in any case elected him to another three-year term.

Vasella has come under fire from some shareholders for being an outlier in holding both top jobs amid an ongoing debate in Switzerland as to whether a chief executive involved in the day to day activities of the company can also do justice to the job of chairman.

Some analysts believe the decision by cross-town rival Roche Holding AG to split the top jobs will put pressure on Vasella to follow suit.

But Vasella said that just because something might be “fashionable” does not necessarily make it right for Novartis.

“In a succession or merger situation you may have a different model than if you are stable,” he said.