IN the shipping realm, there is a leadership attribute hinting that we can have two skippers on the same ship, but we cannot afford to have two destinations for there is where failure starts.
However, in the kitchen realm, we are often reminded of the age-old adage of too many cooks spoil the broth although large restaurants do welcome more than one chef to ensure its success.
In the same light, it is no longer uncommon in today’s corporate world for some companies to pursue the co-CEO or joint chief executive model of leadership.
While having two heads can be better than having one, such co-leadership model demands professionalism and mutual understanding par excellence from both heads lest the ensuing leadership falls apart.
A rarity at best among Bursa Malaysia-listed companies, Berjaya Corp Bhd (BCorp) has joined the fray recently with the appointment of company veterans Vivienne Cheng Chi Fan and Syed Ali Shahul Hameed as joint group CEOs effective April 1.
This follows the departure of Abdul Jalil Abdul Rasheed as group CEO of the company effective 31 March 2022.
This is not the first time Tan Sri Vincent Tan Chee Yioun, BCorp founder and chairman, has had the co-leadership model within his stable of companies.
Recall that back in October 2020, retail and convenience store operator 7-Eleven Malaysia Holdings Bhd had appointed its then chief financial officer Wong Wai Keong and executive director Tan U-Ming as the co-CEOs for the company with effect from Dec 1, 2020.
Beyond our shores, American subscription streaming service and production outfit Netflix Inc seems to be coping well by having two CEOs in co-founder Reed Hastings who oversees the streaming side of the company while Ted Sarandos guides Netflix’s content.
Closer to home, Korean conglomerate Samsung Electronics Co has two CEOs – Han Jong Hee and Kyung Kye Hyun – who were appointed to their position in late 2021 overseeing different businesses within the electronic giant. Samsung used to have three co-CEOs in 2013 and 2018 respectively.
The good and bad
It has been said that the co-CEO leadership concept is gaining more recognition of late following the eruption of the COVID-19 pandemic whereby running a business organisation amid the global health crisis has taken its toll on the mental health of C-suite executives with the pressing needs of managing their remote workforces.
Even now as companies are placing intense focus on recovery and growth in the toughest of economic climates, more are beginning to question the status quo. This has led many businesses to adopt a co-CEO model based on the theory that they drive business recovery without the risk of draining one individual.
But the truth remains that the success rate of the co-CEO arrangements varies from one industry to another with much mixed outcome. This can be predominantly attributed to the fact that “although two heads are better than one, no two heads can think alike”.
Critics of the co-leadership believe that the key to a successful organisation is to have an effective decision process and have the right influences around the sole decision maker – the CEO.
In 2020, software firm SAP abandoned its co-CEO structure after just six months, stating “a lone CEO model” would “provide a clearer leadership structure” to tackle pandemic-related business challenges. Tire maker Pirelli’s co-CEO Angelos Papadimitriou also walked out in January 2021 after only six months on what was said to be a mutual decision.
Interestingly, however, HR Asia – a regional publication on HR issues – believes that “counter-intuitively, joint executive leadership structures can and do work given the right conditions.”
Below are some of its perspectives:
- More robust business decisions: Having a shared governance structure allows two CEOs with different personalities, backgrounds and experience to share perspectives, knowledge and experience on significant business decisions as well as aiding policymaking. Using the other as a sounding board, there is less chance of major decisions being compromised through personal bias as well as granting a greater level of objectivity.
- Better strategic management: The structure brings together two individuals with job complementarity or educational complementarity (e.g., a CEO with an MBA while the other has a graduate science background). This brings together a broader set of experience and knowledge as well as produce better long-term strategies.
- Shareholder interest protected: With co-CEOs, self-regulation comes into play. Each CEO ensures the other works as hard as them to boost results, reducing the need to link pay and performance as much as with single CEO. Moreover, the presence of a co-CEO creates a situation of implicit mutual monitoring, leading to greater accountability in the management and the protection of the interests of investors and other stakeholders.
Conclusion
There are undoubtedly pros and cons in both the single CEO and co-CEO leadership models. From the minority shareholders’ stand-point, it is hoped that the board of BCorp has dutifully weighed the suitability of implementing the co-CEO model within the group as this will certainly increase the success rate of its implementation.
Unorthodox as it sounds, it is hoped that such a leadership model can further enhance shareholders’ value given the share price of BCorp has been on a downslide from an intra-day high of 50.5 sen (more than a six-year high) reached on April 1, 2021 to the current price range of 23 sen (a 54% dip).
In the end, there should be a partnership between the two co-CEOs and there needs to be boundaries to the roles they play in the operational and decision-making process of the business.
Then again, dual CEO situations may very well be an interim measure pending the emergence of a single CEO. – March 27, 2022
Devanesan Evanson is CEO of the Minority Shareholders Watch Group (MSWG).
The views expressed are solely of the author and do not necessarily reflect those of Focus Malaysia.
