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Co-CEOs are becoming more prevalent as companies face increasing demands from stakeholders, shareholders and regulatory bodies.
The role of CEO has never been more demanding. Regulatory complexity, capital pressures, technological disruption and relentless stakeholder scrutiny have transformed what was already the most exposed seat in any organisation. Yet the default assumption – that one person should carry all the responsibility – is rarely questioned in the boardroom. A small but growing number of companies are quietly challenging that assumption by appointing two CEOs. They’re finding that the model delivers not just operational resilience, but better decisions, stronger governance and leaders who last.
John Lennon and Paul McCartney. Warren Buffett and Charlie Munger. Some people just work better together. Having two leaders across the business is a way to address the heavy workload and relentless hours.
Dan McLennan and Matt Berg are co-CEOs at Local, a build-to-rent (BTR) organisation established in 2021. They ran a consultancy together before co-founding Local. Both also worked at Australian property developer Grocon prior to that.
“Having co-CEOs with no history of working together, no backdrop in terms of that deep understanding of values, skills, strengths, would be very challenging,” says McLennan. “Those are essential ingredients.”
Their investors and members of the board had seen them work together successfully in their previous jobs, so in the case of Local, the level of risk was perhaps less than if they were completely unknown.
McLennan’s strengths lie in development and investment, while Berg says his primary focus is on corporate duties, and people and property management.
For boards to even consider co-CEOs, Berg suggests a few preconditions:
Have they worked together for years, not months?- Do they have defined, complementary domains?
- Is either one excessively competitive or hungry to take all the credit?
- Do they have mutual respect and implicit trust, not just professional regard?
Local has always had a chief financial officer and recently appointed a chief operating officer. Macquarie Asset Management Real Estate provided funding (including for real estate projects) and strategic advice. Several of the businesses in Macquarie’s portfolio have co-CEOs in place.
McLennan is chair of the private company’s board, which also has Berg, plus independent directors and representatives from Macquarie Asset Management Real Estate around the table.
Now with more than $2.4b in assets under management, Local’s total portfolio has some 3600 apartments under construction or management.
The company has five key projects in Melbourne – Kensington, Box Hill and South Melbourne, as well sites at Southbank and Docklands. It holds Australia’s largest operational build-to-rent community, Smith Collective, in Southport on Queensland’s Gold Coast. Several other proposals are also in development.
Dynamite duo
McLennan and Berg stress the board doesn’t see them as two separate executives and note the importance of a non-negotiable, unified scorecard.
“We have a single set of KPIs. If we had different KPIs, we wouldn’t come to a clean set of decision making that was best for the business,” says Berg. “We might say, this is going to affect my KPI and my bonus more, therefore I’m going to lean harder into this.”
McLennan points out that the board’s support is also an important factor.
“As much as the role structure has been incredibly successful for Local because of how Matt and I have conducted ourselves, it is equally true that it’s been a success because of how the board has responded to it and conducted themselves.”
At times, he admits, the arrangement might impose additional discipline or challenges on them.
“You can’t have a favourite CEO,” says McLennan. “You can’t have a CEO you have conversations with because the other CEO annoys you. There needs to be a degree of unity in how the board conducts themselves with both CEOs.”
The flip side is that the CEOs can’t present divergent strategic views to the board, either. They both feel the support they give each other enables each to be a better co-CEO, whether that be as a sounding board for ideas or because they have confidence in the other’s ability to make decisions. This frees up time and creates efficiencies. They can be in different places at the same time, and should one be unable to attend something through sickness or annual leave, the other can step in.
“Being a CEO can be pretty lonely,” says McLennan. “The board is not necessarily there to be a shoulder to cry on for management. Nor, as a CEO, is it acceptable to transfer your anxieties to your staff. Your execution quality is improved a lot when you’ve got that extra set of eyes and extra mind being applied to things. Businesses need CEOs to be operating at their optimal performance levels, and that can’t happen if they’re not able to switch off.”
Five things boards must understand before appointing co-CEOs
Belinda Coates GAICD, founder and CEO of global business consultancy Harper B, and a non-executive director at not-for-profit Storey Residential, has worked across multiple co-leadership arrangements. Here is her checklist for boards.
1. This is not job sharing. Both leaders must be capable of stepping into each other’s shoes. The value is in two complete leaders who have different leanings. If the C-suite underneath them is strong, the co-CEOs are freed to lead and grow. If they’re trying to cover every specialist function themselves, the model will collapse under its own weight.
2. Delegation of authority must be defined emotionally, not just financially. Every board sets financial delegation thresholds. With co-CEOs, the more important question is, which decisions will feel wrong to one CEO if made independently by the other? These are rarely big-ticket items. They’re the mid-level calls that touch shared territory. Getting explicit about this early prevents quiet resentments surfacing.
3. Conflicts of interest are sharper. The board must be scrupulously even-handed. Relational bias can be a problem. Directors cannot have a preferred CEO or route sensitive conversations through one and not the other. They must be seen by both to be even-handed. The co-CEO model asks something of the board, not just management.
4. North Star alignment must be tighter than in a single-CEO structure. With two CEOs, the margin for interpretive drift is narrow. A single set of performance measures, rather than individual scorecards, is mandatory. It is the structural foundation that keeps incentives aligned and prevents the arrangement from becoming a competition.
5. Succession must be planned before it becomes urgent. When one co-CEO departs, a replacement can’t simply be slotted in. Boards should plan for three possible paths: a transition to a single CEO, elevation of a senior internal candidate into a co-role, or a structured handover period. The model lends itself to this as someone is always present to mentor the next generation of leadership from within.
Shared success
Hiring co-CEOs is not about finding ego-free people, but people whose identities are sufficiently intertwined that the other’s success genuinely feels like their own.
“When Dan succeeds, I consider I’ve also succeeded,” says Berg.
“We have egos, of course, that’s part of being human, but we divorce ourselves from that. You can have that very hard logical alternative viewpoint that maybe goes against an intrinsic bias.
“If you can remove yourself from being defensive if someone questions your viewpoint, you are definitely going to get a better outcome on that very important decision.”
The demands on a CEO are not diminishing. Tenure, compliance, difficulty raising capital, AI, cyber and the need for specialty skills layer to create what some might consider an impossible task. Unless it can be shared.
However, boards need to understand that having co-CEOs is a situational tool, not something that would work for every business.
“I don’t think you’d ever hardwire into an enterprise that you should only ever have one CEO,” says McLennan.
“By the same token, I don’t think you should ever hardwire in that you should only ever have two CEOs. That would be an unnecessary limitation.”
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