David Rockefeller once told me that his appointment as president of Chase Manhattan Bank in 1960 came a decade later than it should have. He started as an assistant teller and painstakingly worked his way up the hierarchy, but his uncle’s prior leadership role made the bank fear charges of nepotism. Even after taking the helm, he was forced to share the chief executive duties with his chairman, the highly conservative George Champion, who acted as a frustrating restraint on Rockefeller’s innovation and globalization initiatives.
Today, thanks to pressure from governance experts, only half of S&P 500 CEOs are led by a dual chairman/CEO, down from 77% 15 years ago. Yet research shows no positive impact on CEO conduct or company performance from separating the roles.
In fact, 30 years ago, the legendary Thomas J. Watson Jr. of IBM confided to me that he was amused by the widespread adoption of IBM’s troika division of “C-suite” powers, which he designed in 1971, dividing powers between the chairman, president, and vice chairman. He said it was based on his distrust of the ego of his successor and not on any of the imputed strategic logics.
Having served on and led hundreds of commissions and panels on succession, my experience is that co-leadership doesn’t work. There are exceptions. Founder Ray Dalio successfully yielded the reins of Bridgewater, the world’s largest hedge fund, to co-CEOs David McCormick and Eileen Murray. And Oracle founder Larry Ellison’s anointed successors, Safra Catz and Mark Hurd, are soaring in a joint CEO structure he created for them. But as a general rule, doling out chieftainships across an organization’s upper echelons only serves to undermine and dilute the leadership role.
Given that we now have chairman/CEOs, executive chairs, non-executive chairs, president/CEOs, and chairman/president/CEOs, it’s not surprising that lead directors, managing directors, presiding directors, investors, regulators, customers, and sometimes even employees wonder just who is in charge of the place. Layer on top the myriad CFOs, COOs, CMOs, CIOs, CTOs, CHROs, CLOs, CAOs, CISOs, and CSOs cluttering the hierarchy, and the question arises: are there are simply too many chiefs?
Each of these chief designations typically boasts one or more professional associations, which regularly assure members that they are the most worthy partner to the CEO and most underappreciated by their boards. Further complicating the C-suite scrum, many companies have repackaged business unit leadership roles into CEO titles over the past decade or so.
Amazon, for example, recast its senior vice president of consumer business—a superb manager—as CEO of worldwide consumer businesses, with the identical duties and reporting relationship. Similarly, until two years ago, the brilliant CEO of Amazon Web Services (AWS) had the identical duties and reporting relationship but the title of senior vice president. Both of these leaders have been with Amazon roughly since its founding, as has their peer, the CFO, who suffers with the lowly senior vice president status. Similarly, down the coast at Alphabet, the business unit heads of Google, Waymo, Sidewalk Labs, Access, Verily, etc. each hold a CEO title.
Is this a West Coast status syndrome? Not necessarily. There’s only one Apple CEO—Tim Cook—and all other vital, loyal department bosses seem content with various forms of vice presidency titles. Similarly, Starbucks has only one CEO. At Facebook, the founder CEOs of WhatsApp and Instagram departed, with their successors no longer laying claim to the title.
Nor has the title-doling trend infiltrated every quarter. Plenty of companies, to their credit, aren’t falling prey to it. At Walt Disney, the head of ESPN was promoted to the title of president of ESPN and co-chair of Media Networks from his previous title of chairman of Disney Consumer Products and Interactive Media. But there is only one CEO in the company, the visionary Bob Iger.
Here’s what the CEO name game has taught us:
- There are no universal formulas on the use of titles.
- Titles should consider the background career attainment and external ambassadorial duties of candidates.
- The culture is vital. At UPS, there are only five levels of management, with a Spartan use of vice presidency titles and many varieties of managers.
- Watch for dilution that makes titles meaningless, like the old jest that likened being a vice president at JPMorgan in the ’70s to being a colonel in Kentucky.
- Beware of the commercial incentives of professional associations to mystify functions as they serve their respective “C-suite” constituents.
As Shakespeare noted, “A rose by any other name would smell as sweet.”