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Can two leaders truly run the show? The co-CEO model is back in the spotlight, as major players like Oracle, Comcast, and Spotify roll out dual-leadership experiments to harness complementary strengths or smooth founder transitions. But does splitting authority at the top actually work? A management study offers the first comprehensive, large-scale look at how the balance of power between co-CEOs shapes organizational success—and reveals why “equal means better” may be a myth for the C-suite.
What researchers found:
- Unity of command matters—even in co-CEO structures. Companies perform best when one co-CEO holds a clear, but not excessive, edge in formal power over the other.
- Moderate power gaps boost performance. Firms where one leader is slightly more powerful than the other enjoyed the highest returns; as measured by operating ROE, performance peaked at moderate gaps and fell off at both perfect equality and extreme disparity.
- Perfect equality backfires. When co-CEOs share power equally, returns are substantially lower and the risk of indecision or conflict rises.
- Excessive gaps also harm results. Firms with one dominant co-CEO see diminishing returns and, in some cases, outright negative effects.
- The key lesson: Too much balance creates confusion, while too little breeds disengagement and instability.
How we know:
The research examined 71 publicly traded U.S. companies led by co-CEOs from 2000 to 2011. Power gaps were calculated using executive compensation, tenure, board titles, and stock ownership. Performance was tracked through operating ROE, supplemented with market-to-book and ROA. Advanced regression analyses controlled for factors such as industry and firm size.
What this means:
- For boards and HR: If considering a co-CEO arrangement, don’t aim for perfect parity. Instead, assign at least one explicit domain or decision-rights to one leader, ensuring clarity and agility in high-stakes moments.
- For organizations and advisors: Regularly audit the real and perceived power balance. After mergers or other shocks, revisit and rebalance authority if needed.
- For researchers: This study sets the foundation; future work should tackle private firms and global settings and dig deeper into how informal authority develops.
Now what:
- Apply structured processes to review co-CEO power balance annually.
- Build clarity into succession plans and founder transitions.
- Foster collaboration but always clarify who decides in moments of crisis.
