Bret Taylor, perhaps best known as Twitter's board chair before Elon Musk took that company private, surprised everyone when he resigned from his day job as co-CEO of Salesforce this week.
His departure raised questions, once again, about the wisdom of demanding that two executives share the top job. Intuitively, it seems like an impossible ask of the types of executives who rise to the C-suite with sights set on the corner office.
Governance experts hold mixed opinions about the structure, one that's more common in family-owned and private firms than in listed companies. The dual-leader system is a tradition in private equity, but only about 4% of public companies have two chiefs, according to Dinesh Hasija, assistant professor of management at Augusta University’s James M. Hull College of Business.
With Taylor’s departure, just seven Fortune 500 companies have co-CEOs. That list includes:
- Lennar, a Florida-based home construction firm
- Netflix, the streaming giant
- Markel, though the insurer will have only one CEO again in 2023
- KKR, the private equity firm
- Enterprise Products Partners, an oil and gas pipeline company
- Energy Transfer, another pipeline company
- American Financial Group, an insurance firm run by two brothers
Hasija calls the co-CEO model a double-edged sword. He says that two leaders might create confusion or lose trust in each other, and decision-making might consequently suffer.
But when the arrangement works, there are several benefits. CEOs co-running a company can positively impact its corporate social responsibility record, according to research led by Hasija. That finding makes sense, he says. “[CSR] is not really about performance. It's not about profitability. It's about addressing the needs of multiple stakeholders, and when you have two people doing that, they are reaching out to different stakeholders."
For the same reason, he expects to see more companies experiment with co-chiefs. "The demands on the CEO are increasing over time, and it's creating issues for one CEO to handle all of these issues internally and externally," he argues.
Read more about what Hasija and other experts view as the right business conditions for co-CEOs, why a two-person team may outperform its solo counterpart, and the role boards should play in supporting co-leaders, here.
Lila MacLellan
lila.maclellan@fortune.com
@lilamaclellan
