To have co-CEOs or not? That is the question!

As Shakespeare certainly didn't say, "To have co-CEOs or not to have co-CEOs, that is the question".

But it certainly does appear to be the question given the mountain of reactions and comments I’m still getting to my post a couple of weeks ago on this issue (see “RANT ALERT: There is no such thing as co-CEO)”.

You will recall I gave short shrift to an article by FT journo patrick jenkins about to a study published by the Harvard Business Review (HBR) suggesting that companies with co-CEOs performed better than those with sole CEOs.

So I checked out the original HBR article to see if there really was compelling evidence.

The article was published in the July-August 2022 HBR issue by authors Marc Feigen, Michael Jenkins and Anton Warendh. I found it more a recipe for making a co-CEO model work than a justification. Most of the ‘ingredients’ made sense (e.g. You need Board support and an exit strategy). But I think the article was more aimed at companies that had already made the decision.

What I didn’t get from the article were convincing reasons why you’d make that decision in the first place.

Had the business been run so badly under sole CEOs that the Board thought that double the trouble would be a better idea? Or was it that the Board couldn’t decide between two strong candidates and didn’t want to risk losing either (i.e. weak Board)?

Or, as one reason the authors suggested, the business had become so complex and multifaceted that it was too much for a single leader to manage. I think that’s a deeper problem which requires a quite different solution.

The stats in the report were scant. The authors analysed 87 public companies whose leaders were identified as co-CEOs among 2,200 companies listed in the S&P Global 1200. They found that firms with co-CEOs generated an average shareholder return of 9.5% while co-CEOs were in charge vs an average 6.9% for each company’s relevant index. Averages are nobody’s friend.

In fairness, the authors point out that the co-CEO model doesn’t suit all businesses, and there have been notable failures too (they call out SAP and Research In Motion as examples).

I commend their article to you (https://lnkd.in/ertyTNiv) and let you come to your own conclusions.

Mine haven’t changed.