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CEOs who are also board chairs are the problem not the solution, says top governance expert

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When Citigroup last week gave CEO Jane Fraser the additional role of board of directors’ chair, the event was a widely covered ho-hum. CEOs are often board chairs as well, and the move merely gave her the same positions held by JPMorgan Chase’s Jamie Dimon and Goldman Sachs’s David Solomon. But the news isn’t quite as ho-hum as it seems.

“They were wrong to do that,” says Charles Elson, founding director of the John L. Weinberg Center for Corporate Governance at the University of Delaware and a director on several boards over his career. “The CEO is being overseen by the board, and it doesn’t make sense for the person being monitored to chair the group that’s monitoring them.” 

Asked for comment, Citi responds, “The lead independent director has the responsibility for organizing and leading sessions with the independent directors (without management present) to evaluate CEO performance, including strategy execution and leadership.”

The logic of separating CEOs from board chairs may seem obvious, but it was flouted for decades when individual investors owned most corporate shares and mostly voted the way the company wanted, if they voted at all. “There was no shareholder large enough to demand a seat on the board,” Elson says. In that environment, CEOs in 1990 were also board chairs at more than 90% of traded companies. 

It could be a cushy life for CEOs. I well recall the CEO and board chair of a manufacturing company (which I won’t name) telling me smugly he had just bought a corporate airplane for his directors to use. He said he didn’t expect much trouble from them after that.

Then power shifted. Institutional investors like pension funds began accumulating significant amounts of shares in the 1990s and started voting to separate CEOs from board chairs. The financial crisis of 2008-2009 was a turning point: Citigroup, Bank of America, and AIG, badly damaged and under pressure from shareholders and regulators, separated their CEOs from their board chairs. Now, with Fraser’s new title, all three companies have reverted to CEOs who are also board chairs.

Nonetheless, the big picture shows a dramatic shift to board chairs separate from the CEO over the past 35 years. Only 40% of the Fortune 500 have CEO board chairs. But on the rise is a different title with the same effect: “executive chair.” That’s a board chair, often a recently retired CEO remaining on the board, who oversees the company’s day-to-day workings (thus the word “executive”). Operationally, the executive chair is the real CEO without the title. It’s another way for that real CEO to be board chair too.Elson’s view: “Those who forget the mistakes of history are doomed to repeat them. Sad but classic.” —Geoff Colvin

Contact CEO Daily via Diane Brady at diane.brady@fortune.com

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CEO Daily is compiled and edited by Joey Abrams and Jim Edwards.

This is the web version of CEO Daily, a newsletter of must-read global insights from CEOs and industry leaders. Sign up to get it delivered free to your inbox.



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The Coast Guard has seized a record amount of cocaine while Trump says interdiction has failed

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 In justifying American military strikes on boats suspected of smuggling drugs, President Donald Trump has asserted that the longtime U.S. strategy of interdicting such vessels at sea has been a major failure.

“We’ve been doing that for 30 years,” he said last month, “and it’s been totally ineffective.”

Trump’s comments came around the same time that the U.S. Coast Guard announced it had set a record for cocaine seizures — a haul of 225 metric tons of the drug over the previous year. That milestone, however, has not dissuaded the Republican president from upending decades of U.S. counternarcotics policy.

Under Trump, the U.S. military has blown up 20 suspected drug boats, resulting in 80 deaths, in the Pacific Ocean and Caribbean Sea. Trump and other top officials have contended that such boats are being operated by narco-terrorists and cartel members with deadly drugs bound for America.

The strikes have generated international pushback from foreign leaders, human rights groups, Democrats and some Republicans who have raised concerns that the United States is engaging in extrajudicial killings that undermine its stature in the world.

Veterans of the drug war, meanwhile, say U.S. resources would be better spent doubling down on the traditional approach of interdicting drug boats, especially in the long term. That is because crews of drug boats frequently have valuable intelligence that can help authorities better target cartels and trafficking networks. Dead men, they say, tell no tales.

The Coast Guard has fought the drug war a long time

The Coast Guard for decades has interdicted small vessels suspected of smuggling illicit narcotics. Much of that work is focused on halting shipments of cocaine, most of which is produced in the jungles of Colombia.

Working with partner nations and other federal agencies — the Drug Enforcement Administration, the departments of State and Justice as well as U.S. Southern Command’s Joint Interagency Task Force-South in Key West, Florida — the aim is to inflict heavy losses on traffickers and limit the amount of drugs entering the U.S.

That campaign, by at least one measure, has never been more successful, despite constant complaints by the Coast Guard that it lacks funding to seize even more drugs.

The Coast Guard’s recent record cocaine seizure was almost 40% higher than the past decade’s annual average. The haul included 38 tons of cocaine offloaded by the cutter Hamilton when it returned from a two-month patrol. It was the largest amount confiscated by a single Coast Guard ship during a deployment, the Coast Guard reported. The interdictions have continued as part of what’s known as Operation Pacific Viper even during the federal government shutdown, with several cutters reporting major seizures last month.

In almost every case, drug smugglers have been brought to the U.S. for prosecution, and valuable information about ever-changing smuggling routes and production methods was collected — all without any loss of life and a far lower cost to American taxpayers. Experts said each missile strike is likely to cost far more than the payload of cocaine on every ship.

“The Coast Guard has extraordinary powers and authorities to do effective drug interdiction without killing unidentified people on small boats,” said Douglas Farah, a national security expert on Latin America and president of IBI Consultants. “When resourced, they are far more effective, sustainable and likely legal than the current Pentagon-led operations.”

Trump administration officials say strategy needed to change

Secretary of State Marco Rubio this week defended the shift in strategy, saying that “interdictions alone are not effective.”

“Interdictions have limited to no deterrent effect,” he added. “These drug organizations, they’ve already baked in the fact they may lose 5% of their drug shipments. It doesn’t stop them from coming.”

Part of the problem is that demand for cocaine is high, and supplies have never been so robust, according to authorities and experts. A sign of that trend: Cocaine prices have been hovering at historical lows for more than a decade.

The Coast Guard also does not have enough vessels or crew to halt it all. At most, it seizes not even 10% of the cocaine that officials believe flows to the U.S. on small vessels through what is known as the “Transit Zone” — a vast area of open water larger than Russia.

Cocaine shipments bound for the U.S. primarily work their way up the west coast of South America to Central America and then overland into the U.S. via Mexico. Shipments heading to Europe are smuggled through the Caribbean, often hidden in container ships.

Such interdiction efforts target cocaine, not fentanyl

In social media posts, Trump has claimed that his strikes have blown up boats carrying fentanyl and that each destroyed vessel has saved 25,000 American lives. According to experts and former U.S. counternarcotics officials, Trump’s statements are either exaggerations or false.

For the past decade, U.S. officials have sounded the alarm about rising overdose deaths in the U.S., particularly from opioids and synthetic opioids. Overdose deaths from opioidspeaked in 2023 at 112,000 but dropped to 74,000 in April. Experts have attributed that decline mostly to Biden administration efforts to boost the availability of lifesaving drugs that prevent overdose deaths.

The drug flowing to the U.S. from South America is cocaine. Fentanyl, on the other hand, is typically trafficked to the U.S. overland from Mexico, where it is produced with chemicals imported from China and India. Cocaine overdose deaths are less frequent than those from fentanyl. In the last year, just under 20,000 people in America died from cocaine overdoses, federal data shows.

Trump and administration officials have also claimed that the crews of targeted vessels were narco-terrorists or members of cartels.

The Associated Press visited a region in Venezuela from which some of the suspected boats have departed and identified four men who were killed in the strikes. In dozens of interviews, residents of the region and relatives said t he dead men were mostly laborers or fisherman making $500 a trip.

Law enforcement officials and experts echoed those findings, saying the smugglers captured by the Coast Guard are hired for little money to ferry drugs from point A to point B.

“They are hardly kingpins,” said Kendra McSweeney, an Ohio State University geographer who has spent years researching U.S. drug policies.

Trump administration officials recently promoted big seizures

In April, months before Trump launched his military campaign, his attorney general, Pam Bondi, traveled to South Florida to welcome home the Coast Guard cutter James from its latest antinarcotics patrol. It had seized 20 tons of cocaine worth more than $500 million.

Flanked by FBI Director Kash Patel, she praised a “prosecutor-led, intelligence driven approach to stopping these criminal enterprises in their tracks.”

“This is not a drop in the bucket,” said Bondi, standing in front of the vessel loaded with colorful, plastic-wrapped bales of narcotics stacked several feet high. “Behind you is half a billion dollars of pure, uncut cocaine.”



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The 2026 class of American Rhodes scholars includes 5 students at U.S. military academies

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Five students at U.S. military academies and three each from Yale University, Harvard University and the Massachusetts Institute of Technology are among the 32 American winners named Sunday as 2026 Rhodes scholars.

The group includes students focused on housing, health outcomes, sustainability and prison reentry programs. They include:

Alice L. Hall of Philadelphia, a varsity basketball player at MIT who also serves as student body president. Hall, who has collaborated with a women’s collective in Ghana on sustainability tools, plans to study engineering.

Sydney E. Barta of Arlington, Virginia, a Paralympian and member of the track team at Stanford University, who studies bioengineering and sings in the Stanford acapella group “Counterpoint.” Barta plans to study musculoskeletal sciences.

Anirvin Puttur of Gilbert, Arizona, a senior at the U.S. Air Force Academy who serves as an instructor pilot and flight commander. Puttur, who is studying aeronautical engineering and applied mathematics, also has a deep interest in linguistics and is proficient in four languages.

The students will attend the University of Oxford as part of the Rhodes scholar program, which awards more than 100 scholarships worldwide each year for students to pursue two to three years of graduate studies.

Named after British imperialist and benefactor Cecil John Rhodes, the scholarship was established at Oxford in 1903. The program has more than 8,000 alumni, many of whom have pursued careers in government, education, the arts and social justice.



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Most advanced US aircraft carrier adds to the growing fleet of warships near Venezuela

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The nation’s most advanced aircraft carrier arrived in the Caribbean Sea on Sunday in a display of U.S. military power, raising questions about what the new influx of troops and weaponry could signal for the Trump administration’s intentions in South America as it conducts military strikes against vessels suspected of transporting drugs.

The arrival of the USS Gerald R. Ford and other warships, announced by the Navy in a statement, marks a major moment in what the administration insists is a counterdrug operation but has been seen as an escalating pressure tactic against Venezuelan President Nicolás Maduro.

The Ford rounds off the largest buildup of U.S. firepower in the region in generations. With its arrival, the “Operation Southern Spear” mission includes nearly a dozen Navy ships and about 12,000 sailors and Marines.

The carrier’s arrival came as the military announced its latest deadly strike on a small boat it claims was engaged in ferrying illegal drugs. The military’s Southern Command posted a video on X on Sunday showing the boat being blown up, an attack it said took place Saturday in international waters of the eastern Pacific Ocean and killed three men. A request for more information from the military was not immediately answered.

Since early September, such strikes by the U.S. in the Caribbean and eastern Pacific have now killed at least 83 people in 21 attacks.

The carrier strike group, which includes squadrons of fighter jets and guided-missile destroyers, transited the Anegada Passage near the British Virgin Islands on Sunday morning, the Navy said.

Rear Adm. Paul Lanzilotta, who commands the strike group, said it will bolster an already large force of American warships to “protect our nation’s security and prosperity against narco-terrorism in the Western Hemisphere.”

Adm. Alvin Holsey, the commander who oversees the Caribbean and Latin America, said in a statement that the American forces “stand ready to combat the transnational threats that seek to destabilize our region.”

Holsey, who will retire next month after just a year on the job, said the strike group’s deployment is “a critical step in reinforcing our resolve to protect the security of the Western Hemisphere and the safety of the American Homeland.”

In Trinidad and Tobago, which is only 7 miles from Venezuela at its closest point, government officials said troops have begun “training exercises” with the U.S. military that will run through much of the week.

Minister of Foreign Affairs Sean Sobers described the joint exercises as the second in less than a month and said they are aimed at tackling violent crime on the island nation, which has become a stopover point for drug shipments headed to Europe and North America. The prime minister has been a vocal supporter of the U.S. military strikes.

The exercises will include Marines from the 22nd Expeditionary Unit who have been stationed aboard the Navy ships that have been looming off Venezuela’s coast for months.

Venezuela’s government has described the training exercises as an act of aggression. It had no immediate comment Sunday on the arrival of the aircraft carrier.

Meanwhile, Army Secretary Dan Driscoll said Sunday that U.S. troops have been training in Panama, underscoring the administration’s increasing focus on Latin America.

“We’re reactivating our jungle school in Panama. We would be ready to act on whatever” Trump and Defense Secretary Pete Hegseth needed, he told CBS’ “Face the Nation.”

The administration has insisted that the buildup of American forces in the region is focused on stopping the flow of drugs into the U.S., but it has released no evidence to support its assertions that those killed in the boats were “narcoterrorists.” Trump has indicated military action would expand beyond strikes by sea, saying the U.S. would “stop the drugs coming in by land.”

The U.S. has long used aircraft carriers to pressure and deter aggression by other nations because their warplanes can strike targets deep inside another country. Some experts say the Ford is ill-suited to fighting cartels, but it could be an effective instrument of intimidation for Maduro in a push to get him to step down.

Secretary of State Marco Rubio says the United States does not recognize Maduro, who was widely accused of stealing last year’s election, as Venezuela’s legitimate leader. Rubio has called Venezuela’s government a “transshipment organization” that openly cooperates with those trafficking drugs.

Maduro, who faces charges of narcoterrorism in the U.S., has said the U.S. government is “fabricating” a war against him. On his Facebook page, Maduro wrote on Sunday that the “Venezuelan people are ready to defend their homeland against any criminal aggression.”

Venezuela’s government recently touted a “massive” mobilization of troops and civilians to defend against possible U.S. attacks. Maduro and other officials in Venezuela’s socialist party also have been attending rallies this weekend to back the creation of neighborhood committees that will be in charge of increasing membership in Venezuela’s socialist party, and promoting the party’s policies.

Trump has justified the attacks on drug boats by saying the U.S. is in “armed conflict” with drug cartels while claiming the boats are operated by foreign terrorist organizations.

He has faced pushback from leaders in the region, the U.N. human rights chief and U.S. lawmakers, including Republicans, who have pressed for more information on who is being targeted and the legal justification for the boat strikes.

Senate Republicans, however, recently voted to reject legislation that would have put a check on Trump’s ability to launch an attack against Venezuela without congressional authorization.

Experts disagree on whether or not American warplanes may be used to strike land targets inside Venezuela. Either way, the 100,000-ton warship is sending a message.

“This is the anchor of what it means to have U.S. military power once again in Latin America,” said Elizabeth Dickinson, the International Crisis Group’s senior analyst for the Andes region. “And it has raised a lot of anxieties in Venezuela but also throughout the region. I think everyone is watching this with sort of bated breath to see just how willing the U.S. is to really use military force.”



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