Why co-CEOs may be a bad idea

As we enter the final months of 2025, Disney is inching closer to the announcement the entire entertainment industry has been waiting for: who will replace Bob Iger as the company’s next CEO.

Disney He has publicly stated that he will announce Iger’s successor in early 2026. Two internal candidates stand out as the most likely contenders: Disney Entertainment co-president Dana Walden and Disney Experiences president Josh D’Amaro. Walden brings decades of Hollywood expertise; D’Amaro worked in consumer products before rising up in the theme parks division and was running the unit when the unit’s previous leader, Bob Chapek, was named Disney CEO in 2020.

Given Walden and D’Amaro’s complementary skill sets, and the recent momentum behind joint CEO appointments both in the media and beyond, Disney’s board may choose to jointly select both to replace Iger.

It’s a strategy rival netflix It has been used similarly and effectively since 2020, when Reed Hastings appointed Ted Sarandos as co-CEO. Three years later, Hastings left that position and became executive chairman of the company. Raising Greg Peters He took over as co-CEO.

Netflix’s success has contributed to the recent wave of co-CEOs. Last month, Spotify appointed Alex Norstrom and Gustav Soderstrom as co-CEOs to replace founder Daniel Ek; Seer appointed Clay Magouyrk and Mike Sicilia to jointly run the company; And comcast The chairman appointed Mike Cavanagh to join long-time CEO Brian Roberts in the lead role.

But while the dueling CEO structure may seem superficially meaningful for Disney, company insiders and corporate governance experts warn that there are considerations specific to the House of Mouse that would make such a dynamic implausible.

Last year, Iger called Sarandos and asked him about his model as co-CEO of Netflix. that call reported for the first time It was revealed by the Wall Street Journal in November, and CNBC can confirm it’s happening, according to people familiar with the matter.

Sarandos and co-CEO Peters have different passions, according to people familiar with Netflix’s leadership styles who asked not to be identified because the details are private. This allowed the two leaders to make decisions without stepping on each other’s toes. If Sarandos and Peters disagree on something, they resolve the issue by leaving it to the leader who is more passionate about the answer. This generally means Sarandos will win if it is a content or creative decision, and Peters will win if the decision is more product or technology based. A Netflix spokesperson declined to comment.

If there’s a gray area, the co-CEOs can always lean on Hastings, the company’s co-founder and CEO for 25 years. Peters and Sarandos worked together under Hastings for many years. Sarandos told Iger that comfort level and Netflix’s famously non-hierarchical corporate culture helped maintain a dual CEO structure without battles for dominance and while serving shareholders, people familiar said.

Netflix shares have risen nearly 275% since Peters took over as co-CEO in January 2023.

While Hastings turned his attention Iger, who has turned to hobbies such as skiing since giving up his role as CEO, has gained a reputation for wanting to stick around as Disney’s chief executive. He came out of retirement five times to remain at the helm, returning in 2022 after naming Chapek as his replacement.

Second, during Chapek’s tenure, Iger did not immediately relinquish his operational responsibilities, opting to direct the company’s “creative efforts” for more than a year. This led to an ugly power-sharing situation between Iger and Chapek, as CNBC revealed in 2023. Even if Walden and D’Amaro have different field strengths, choosing a co-CEO model after recently suffering through a period of blurred lines of control could mean failing to learn from one’s mistakes.

Third, Walden and D’Amaro have not worked together as long as Peters and Sarandos (or other co-leader arrangements with long-term success, such as CAA’s co-chair arrangement with Bryan Lourd, Richard Lovett, and Kevin Huvane). Walden worked with Gary Newman at Fox on a co-chairman deal running Fox TV for many years and has proven he can pull off such a deal, but it’s unclear whether he would relish the opportunity to pair up again.

Fourth, Disney’s corporate culture is known to be highly political. The company went through several difficult succession processes with Iger and former Disney CEO Michael Eisner. While Netflix has remained largely untouched by mergers and acquisitions, it was formed from a combination of acquisitions and units over the years, including Disney, ABC, ESPN, Fox, Pixar, Marvel and Lucasfilm. Since its founding, this has brought together employees from many different cultures rather than creating a unified corporate mindset.

“This won’t work for Disney,” a senior media executive told CNBC exclusively. “There would be a lot of backbiting. It’s always been that way.”

A Disney spokesman declined to comment.

About 1.2% of companies in the Russell 3000 index have used a shared CEO structure at some time in recent years, according to The Wall Street Journal. reported last monthHe cites data from Equilar.

“When you create two sources of authority in an organization, that’s never a good thing,” Charles Elson, founding director of the University of Delaware’s Weinberg Center for Corporate Governance, said in an interview. “Two authorities means no one is responsible.”

Still, there are mitigating factors that could make a joint CEO arrangement more acceptable, Elson said. Having Hastings as executive chairman is likely important for Netflix because he could play a de facto tie-breaking role in the joint CEO arrangement.

Similarly, Elson said a co-CEO structure could work if done explicitly for more comprehensive succession planning, such as Comcast’s decision to elevate Cavanagh to co-CEO alongside Roberts.

Elson said Hastings and Roberts could make final calls on the biggest decisions when things start to heat up. Roberts is the controlling shareholder of Comcast. Similarly, Oracle has a controlling shareholder in co-founder Larry Ellison.

Iger could play a tie-breaking role as Disney’s executive chairman, but he is not the company’s founder and owns less than 1% of the outstanding shares. Elson stated that this gave him less of a role in Disney’s future than someone like Roberts or Ellison.

Elson said choosing just one CEO might be a leap of faith for Disney’s board, but it’s better than creating instability.

“Inevitably one CEO dominates and the other one leaves,” he said. “This is the nature of humanity.”

Disclosure: Comcast is the parent company of NBCUniversal, which owns CNBC. Versant would become CNBC’s new parent company, based on Comcast’s planned Versant spinoff.