Running a company is an intense responsibility. The weight of decision-making, the need for visionary leadership, and the management of stakeholders are often more than enough to occupy the full attention of any CEO. Yet, some leaders choose to helm two companies simultaneously. This phenomenon, known as “multi-CEOs,” raises questions about the feasibility of such an arrangement and its legitimacy in the eyes of investors and stakeholders.
Professor Lorenz Graf-Vlachy and researchers from TU Dortmund University in Germany and HEC Lausanne in Switzerland have conducted a recent study published in Academy of Management Discoveries that examines this rare but intriguing trend. The study focuses on the careers of four notable multi-CEOs: Elon Musk, leading both Tesla and SpaceX; Carlos Ghosn, who simultaneously headed Renault and Nissan; Jack Dorsey, the former CEO of Twitter and Square; and Steve Jobs, who held the reins at both Apple and Pixar. These executives are not only icons in their respective industries but also provide key insights into how one individual can successfully manage dual leadership roles.
The idea of a CEO managing more than one firm at the same time seems to challenge conventional wisdom. After all, a CEO is often seen as the ultimate decision-maker whose performance can determine the success or failure of a business. As Constantine Alexandrakis, CEO of executive search firm Russell Reynolds Associates, famously noted, running even a single company demands “150% of a CEO’s attention.” The notion that an individual could balance the demands of two separate organizations naturally raises skepticism among investors and other stakeholders.
To address these concerns, multi-CEOs, along with their board members and allies, employ a variety of strategies to justify and manage their dual roles. One such approach involves acknowledging the challenges of being a multi-CEO while simultaneously framing the arrangement as necessary due to specific circumstances. For instance, companies may conduct a full CEO search process, signalling that the decision for a shared CEO was carefully considered and not hastily implemented. Publicly, these leaders often express the difficulty of their roles, which serves to validate concerns and show that the issue is being taken seriously.
At the same time, multi-CEOs assure stakeholders that the arrangement is workable due to strong executive teams in place at both companies. A prime example is Elon Musk, who credits Gwynne Shotwell, SpaceX’s president and COO, with running much of the day-to-day operations, allowing him to focus on his dual responsibilities. This delegation of duties to trusted lieutenants is a common tactic among multi-CEOs and one that helps maintain the operational efficiency of both companies.
Compensation strategies also play a critical role in managing stakeholder perceptions. In one of the most symbolic cases, Steve Jobs famously accepted an annual salary of just $1 from Apple while holding substantial equity in the company. This arrangement reassured investors that his financial success was directly tied to theirs, aligning his incentives with shareholder interests.
Another technique used by multi-CEOs involves managing physical presence expectations. Jack Dorsey, for example, divided his time between the offices of Twitter and Square, both located in San Francisco, often walking between them daily. Carlos Ghosn, on the other hand, spent his weeks flying between Paris and Tokyo, balancing his commitments to Renault and Nissan. By visibly splitting their time, these leaders demonstrate a commitment to both firms, addressing concerns that one company might receive more attention than the other.
Moreover, conflicts of interest are a major issue for multi-CEOs, but these executives often take steps to mitigate such concerns. They might recuse themselves from decisions that affect both companies, or establish explicit rules to avoid conflicts, reinforcing their commitment to maintaining ethical boundaries.
The research conducted by TU Dortmund University and HEC Lausanne sheds light on how multi-CEOs manage to maintain legitimacy despite the inherent challenges of their roles. According to Professor Graf-Vlachy, one of the study’s authors, “the study improves our understanding of how multi-CEOs get into their positions, and how they get away with it.” By adopting these carefully considered strategies, multi-CEOs manage to operate at the top of two companies simultaneously, while balancing the expectations and scrutiny of shareholders, boards, and employees alike.
Ultimately, the existence of multi-CEOs may challenge conventional management theories, but their strategic approaches highlight the evolving dynamics of modern executive leadership. The study’s findings not only shed light on the complexities of this phenomenon but also offer valuable lessons to stakeholders navigating similar scenarios in the future.
