Personally, I think the Chariman and CEO should be separate positions help by separate people. But, I agree with this commentary that it is better to have one person hold both jobs than have an ex-CEO remain on as chairman.
As a rule, separating the roles of CEO and chairman is something governance experts applaud. But filling the chairman's position with a "lingering CEO" presents a host of problems. The new CEO may be undermined by the old, who is now in a perfect position to second-guess the new chief's strategy and direction. The board will often remain loyal to the old CEO — who may have built up decades of goodwill among directors.
Citi had problems before, and Weill should be smart enough to step down before this happens again.
For a cautionary tale on the dangers of power-sharing arrangements, Citi need look no further than its own recent history. In 1998, when Weill merged Travelers Group into Citicorp, he became co-CEO with John S. Reed, resulting in a distracting power struggle that ended two years later with Reed's departure.
Of course, if I had as much money in a company as Weill does in Citi, I would be reluctant to cede total control too.