Microsoft’s Satya Nadella

Microsoft CEO Satya Nadella is also now chairman of the company’s board of directors. The board elected Nadella to replace John W. Thompson as chairman, Microsoft announced on Wednesday.

Thompson will remain on Microsoft’s board as lead independent director. He the role held from 2012-2014 before becoming chairman. He replaced founder Bill Gates as chairman when the company named Nadella to replace Steve Ballmer as CEO.

In a brief statement announcing the latest move, Microsoft said as chairman, Nadella will set the board’s agenda by “leveraging his deep understanding of the business to elevate the right strategic opportunities and identify key risks and mitigation approaches for the board’s review.”

Microsoft’s decision may not be welcome news among staunch advocates that companies should have separate CEOs and chairpersons. But while Nadella now has even more influence, he will still answer to Thompson.

“As lead independent director, Thompson will retain significant authority including providing input on behalf of the independent directors on board agendas, calling meetings of the independent directors, setting agendas for executive sessions, and leading performance evaluations of the CEO,” according to the company’s statement.

A History of Growth

Nadella has served as CEO for seven years. He has redirected Microsoft into growth markets, notably cloud computing, open-source software and the move toward digitization. Nadella has also steered major acquisitions including LinkedIn, GitHub and the most recently announced intent to acquire Nuance Communications for $19.7 billion.

Nadella, only the third chief executive of Microsoft, is also just the second to serve as both board chairman and CEO. Gates was chairman for the company’s first 25 years, remaining so after stepped down as CEO in 2000. Gates remained on Microsoft’s board after Thompson took over as chairman in 2014. Last year, Gates also gave up his board seat just three months after the board reappointed him.

At the time, Gates had said he was leaving Microsoft’s board to focus on the Bill and Melinda Gates Foundation. But recent reports of inappropriate relationships with staffers have put into question whether that was the only reason he stepped down.

Nadella and Thompson began discussing their transition in late 2020, according to The Wall Street Journal, which quoted a Microsoft spokesman who said this change was not related to Gates’ departure.