The author of the column in the Economist that I cited in my last post has written a kind response, defending his position against my slings and arrows. On one account he is firmly correct: the article he cited is findable, especially after the correct name of the business journal was published on the Economist’s online site. But access to the actual article he cites only leaves me more perplexed about his conclusions.
In the now corrected Economist column, Schumpeter (a nom-de-plume taken, I assume, from the 20th century economist who popularized the notion of creative destruction ) makes the following claim regarding the prevailing wisdom, unsubstantiated by evidence or the academic article that he cites, that co-CEO’s have a dismal track record:
None of this would matter if there were compelling evidence that having two stars at the top of a company routinely led to stellar stockmarket performance. But research published last year in the Journal of Business & Economic Studies, which tracked the share price of 44 firms that took on dual bosses between 1993 and 2005, found that their shares subsequently performed no better than those of similar firms that stuck with a single leader.
The actual article is a rather dense paean to academic excellence, so I will spare you the details and go right to the authors’ conclusion, which states the following: