For some banks, two heads are better than one.

Tired of typical siloed management, CertusHoldings in Greenville, S.C., last month reshuffled senior management to have Walter Davis and Charles Williams share the chief executive title. Though the bifurcated structure is uncommon and easily fraught with social problems, the company's former megabank executives say it adds more eyes to the operation while sharing responsibility.

"A lot of banks have gotten in trouble because of a concentration in power of one person," Davis says. At CertusHoldings the changes make "for better decision-making, quite frankly."

Dual CEOs are rare in banking, but industry observers say the new regulatory climate is leaning toward more independent leadership, where no single person controls the bank. Rod Taylor, a former bank vice chairman and the president of his own consulting firm in Atlanta, calls this the "bifurcated C suite." He says the trend is just beginning.

"You will see more bifurcation in the next generation of leadership," says Taylor, a former bank vice chairman and the president of Taylor & Co. in Atlanta.

"It creates a balance of power. Regulators like it, and with boards [being] much more inquisitive …the CEO can become exasperated," adds Taylor, who was recently asked by four banks to help them evaluate ways to split high-level roles.

Still, only a handful of banks have a co-CEO structure. They include Hancock Holding (HBHC) in Gulfport, Miss., and Love Savings Holding Co. in St. Louis. Foreign banks such as Barclays (BCS) and Deutsche Bank have structures that include two CEOs.

A main critique of having co-CEOs involves the issue of ego, with industry observers discussing the difficulty of having two leaders cohesively run one bank.

"It's not that it cannot work, but it is very unusual," says Robert Voth, a managing partner in the Cleveland office of CTPartners, a compensation consulting firm. "Leadership in banking is at a premium and decisions made by a committee in financial services don't have a strong track record of success."

Such problems often arise when banks attempt a so-called merger of equals, keeping both banks' CEOs in place. This was the case when Nara Bancorp and Center Financial agreed to the merger that created BBCN Bancorp (BBCN). As part of the 2010 merger agreement, Center's president and CEO, Jae Whan Yoo, was expected to become president. A month later, Center ousted Yoo, who then became the president and CEO of Los Angeles competitor, Wilshire Bancorp (WIBC).

"While influence and matrix management is important, more important is a clear path to the decision maker," Voth says. "The board [and] investors look for a clear line of leadership."

Even Hancock, which is widely praised by analysts now, received criticism when it went to dual CEOs in late 2006. Since then, Carl Chaney has been CEO and president, while John Hairston is also a chief executive and chief operating officer.

The key, Chaney says, is to have well-defined distinctions between the CEOs so that employees, directors and shareholders know exactly who to go to.

Chaney handles external affairs and Hairston oversees internal operations. Because of this, Chaney says Hancock has made failed-bank acquisitions, bought larger competitor Whitney Holding in New Orleans, and rebuilt after Hurricane Katrina.

"I don't think the company could have done what we've done with just one leader at the helm," Chaney says. CertusHoldings' management team also has specific distinctions. Jones handles the board. Davis focuses on the traditional banking operation, and Williams focuses on the wholesale business, including mergers and acquisitions.

"Most leaders like choosing people who are most like them," Davis says. But CertusHoldings' leaders "create the diversity and skillset that makes it really special and unique."

K. Angela Webb, tapped as CertusHoldings' president as part of last month's restructuring, gives a simple answer as to how CertusHoldings avoids destructive conflicts. "We do have spirited conversations, absolutely," she says. "But we believe at the end of those conversations that we're smarter for it and that those conversations are more enriched."

Taylor says that more bankers will need to assemble a diverse executive team to fill the gap where bankers were only trained in one subset of the industry, such as commercial lending or retail banking.

"As banks look to the next generation of leadership, they're realizing that there's this 'missing generation' where too few executives were trained and have proven successful experience in multiple areas of banking," Taylor says. "Most have either been in commercial or retail silo and they don't really understand all the moving parts of all of the banks."

CertusHoldings, however, believes its latest moves are providing its team with a way to succeed, both by finding ways to grow and monitoring risk.

"We now have four people looking at the state of the bank, the operation of the bank, the risk of the bank and the condition of bank," Webb says. "We made changes to be commensurate to how we actually run the bank."

Subscribe Now

Access to authoritative analysis and perspective and our data-driven report series.

14-Day Free Trial

No credit card required. Complete access to articles, breaking news and industry data.