Are two CEOs better than one? We debate it.

"Dan: The idea of dual CEOs immediately reminded me of the episode in "The Office" - as is my God-given right as a millennial - where Jim Halpert and Michael Scott become co-managers. However, according to one study, companies with two CEOs actually posted better average annual shareholder returns (9.5%) than single-leader companies (6.9%) from 1996 to 2020. That's not nothing!"

"Joe: I get the main argument against co-CEOs, which is that a company might struggle to function with too many cooks in the leadership kitchen. But as a markets guy, it's hard for me to deny those numbers. That said, you can't just throw any two people together. There needs to be chemistry, deference, and clearly defined role boundaries. Those weren't exactly Michael's strengths, which is why (spoiler alert) that situation didn't work out."

"Just look at the most high-profile current example of co-CEOs: Netflix. Greg Peters and Ted Sarandos have been running the show together (and doing it well) for a few years. Sarandos has said the key is having a set of CEOs who are committed to the model. You also need someone willing to be in the spotlight and, more importantly, someone willing to take a backseat. That seems to have worked out well for Sarandos and Peters, but it's obviously not always the case."

Co-CEO arrangements have gained traction with recent moves at Oracle, Comcast, and Spotify. Dual leadership can allow division of responsibilities and may produce higher shareholder returns—one study found firms with two CEOs averaged 9.5% annual returns versus 6.9% for single CEOs from 1996 to 2020. Successful co-CEO pairs require chemistry, deference, clearly defined role boundaries, and willingness for one leader to take the spotlight while the other takes a backseat. Risks include coordination challenges and lack of a single accountable leader. Netflix's Greg Peters and Ted Sarandos illustrate a functioning co-CEO model when commitment and role clarity exist.

Read at Business Insider