Do co-CEOs really work?

Sharing authority isn’t a particularly radical idea. Most modern democratic political systems (not ours) are based on a separation of powers, specifically to avoid one person being too dominant. Closer to home, many start-up co-founders share control equally though their shareholdings. 

In a corporate setting it’s rare for there not to be a single chief executive running the show, but not unheard of. Increasingly, we’re seeing prominent examples of co-CEOs, including Ted Sarandos and Greg Peters at Netflix, co-MDs Jane Eskriett and Richard Grainger at River Island, and M&S CEO Stuart Machin and co-CEO Katie Bickerstaffe.

Goldman Sachs has a long history of having co-heads of its major divisions, while SAP, Oracle, Chipotle and Harvey Nichols have all been headed by a duo in recent years.

You don’t get co-CEOs by accident. Whether it’s a partnership of true equals, or there remains a hierarchy between them, the appointment of co-CEOs reflects a conscious application of organisational design principles.

So what are they, and does it really work?

Co-CEOs: Pros and cons

There are two potential advantages. The first is that the co-CEOs’s respective strengths complement each other’s weaknesses.

In theory you get a two-headed monster that is more formidable than any one individual could be. They have experiences and perspectives that the other may not, and they can do twice the workload, potentially speeding decision making. The second advantage is that having a co-CEO allows you to share some of the considerable mental and emotional load of being the leader. It doesn’t all rest on you, and you don’t need to be everywhere at once, because you have a partner. It’s the same rationale that has many co-founders singing the praises of not going it alone: a problem shared is a problem halved. By lightening the load, you can not only be more effective as a leader, you can also keep at it longer.

Clearly though, while having a co-CEO mitigates some risks, it also creates others. The main danger is that there is no clarity of leadership. People need to know who makes the final decision, and where the buck ultimately stops.

The co-CEOs themselves will get little done if they’re constantly at loggerheads, or pulling in different directions. The potential for indecision and unproductive conflict is high, if you get it wrong.

Making it work

As with most other approaches to organisational design, success depends on execution. Co-CEO arrangements can work – indeed, a Harvard Business Review study in 2022 showed that companies led in this way outperformed their peers – but it requires a strong, forthright and disciplined working relationship between the two.

It’s essential that they share the same values and vision, particularly over time: like a marriage, it is possible to grow apart, and start wanting different things.

Also like a marriage, good communication is necessary, so one hand knows what the other is doing. There needs to be mutual trust and respect, and some give and take.

The arrangement must also be underpinned by clear and robust lines that show who is responsible for what, with effective mechanisms for settling disputes, and a sense of joint accountability for their performance.

If any one of these things breaks down, so does the working relationship. It’s the reason why even in co-founding pairs, one usually has executive control (think Larry Page, formerly CEO at Google in its pre-Alphabet days, and Sergey Brin, who was President).

If you are going to go for an equal split of power, the key to making sure it doesn’t break down is having a chair strong enough to enforce the rules. That’s certainly the case in places like Netflix and River Island, where the founder or owning family is still very much involved.

It’s not going to become the norm any time soon, but having a co-CEO could be a good option for some businesses, particularly where a single leader may be pulled in too many directions at once.

For boards looking for new blood, it’s something at least not to rule out.

Whether it’s hiring a co-CEO or looking at group leadership structures, make sure your business follows the right organisational design principles to help it grow. Get in touch to find out how we can help.