Clever or risky?

Deutsche Bank on Monday announced Anshu Jain and Jürgen Fitschen will succeed Josef Ackermann as CEO in 2012. The joint appointment was surrounded by intense media speculation in Germany.

Jain and Fitschen will be expected to share responsibilities in leading Germany's most established international bank, which is closely intertwined with German financial politics.

Deutsche Bank was last under dual leadership in the 1980s. News that it would revert to the power-sharing model and has been met with mixed responses by analysts and experts.

Rick Vogel, a professor of Business Organization and Management at the University of Hamburg, says Deutsche Bank currently has good reasons to introduce a dual leadership structure.

For one, it is a compromise between Ackermann, who favors Jain as his successor, and Ackermann's rival, supervisory board chief Clemens Börsig, who favors Fitschen.

But Vogel added that in the "long-term it would be an unusual solution which would in part contradict the hierarchical nature of corporate management."

Boost or block

In the best case scenario co-CEOs complement each other; in the worst case they block each other.

"The disadvantage (of dual leadership structures) is that decision-making processes tend to become more drawn-out and afflicted by conflict," Vogel told Deutsche Welle. "But the quality of the decisions made is often better."

Internationally, only a few companies such as Research In Motion, SAP, Credit Suisse, Oracle and Google have experimented with co-CEO arrangements with mixed results.

Credit Suisse, Oracle and Google have switched back having one top manager, but Research in Motion and SAP continue to operate with co-CEOs.

Larger-than-life boss

Ackermann - who the bank hopes to have elected as chairman of the supervisory board after retiring as CEO in 2012 - not only guided the bank through the worst of the financial crisis but became a fixture in German political life. He has maintained close ties with Chancellor Angela Merkel and his opinion on the Greek debt crisis has been sought widely.

Jain emerged as a front runner for Ackermann's job in July after former Bundesbank chief Axel Weber apparently snubbed Deutsche Bank to join Swiss lender UBS instead. But the 48-year-old Indian speaks little-to-no German, likely impeding his ability to fill Ackermann's political role.

Meanwhile, concerns have emerged over the level of influence Ackermann could continue to exert as Deutsche Bank's supervisory board chairman.

"Will Josef Ackermann now become the third co-CEO?" Reuters reported an analyst asking Chief Financial Officer Stefan Krause when the appointments were announced.

But according to Rick Vogel, a dual leadership structure can be a good way to follow up a larger-than-life boss.

"If a manager has a lot of charisma and power - then that's a challenge for a successor," he said. "Restructuring to dual leadership can ease this problem."

Vogel added that the co-CEO structure could help bridge gaps in Deutsche Bank's corporate culture. Its investment banking arm is most active in London and New York, where Jain made his career. Meanwhile its personal banking operations are based in Frankfurt, which is Fitschen's territory.

Divided core competencies

According to Dagmar Wilbs, head of human capital consulting for Mercer in central Europe, a dual leadership structure was something of a "tradition" at Deutsche Bank during the 1980s and is therefore "not a completely unaccustomed situation."

"It's important that the areas of responsibility and the decision-making processes are clearly defined - especially what happens when there is no consensus," Wilbs told Deutsche Welle. "But generally speaking, this is a setting in which a division of core competencies is very sensible and can be successful for Deutsche Bank."

"Jain and Fitschen complement each other," she added. "On the one hand, Jain is internationally focused and specializes in investment banking, which comes with a culture and a speed all of its own. On the other hand Fitschen knows the German market and culture and has access to the political and economic establishment."

Author: Gerhard Schneibel
Editor: Sam Edmonds