Such is the case with the iconic business duos presented here. These eight famous pairings—one of them infamous for its failure in the final act—present a spectrum of the unique qualities and dynamic teamwork necessary for the effective management of extremely innovative, complex organizations. A variety of top-tier combinations reveal several variations on the theme that two heads are better than one: some, like Richard Sears and Julius Rosenwald, were marriages of necessity; others, such as Sanjay Jha and Greg Brown, co-CEOs of Motorola, were partnered in hopes of salvaging an ailing organization; still others, like Warren Buffett and Charlie Munger, seemed fated to cohabitate in the same corporate host.

The delicate balance required for a successful top-level tandem power structure is no easy achievement, as evidenced by a string of dissolutions; keeping two big personalities in harmony requires a set of unique personality traits on both sides. “It all depends on how they behave and if they can keep their egos in check,” says Harvard Business School Professor Joseph Bower, author of The CEO Within. “It works remarkably well if you also have strong board members who are able to make it work.” The challenge, as Bower sees it, is living up to the age-old adage of “diversity in counsel, unity in command”: however many leaders a company has, it has to move forward decisively. But while having a single visionary at the helm is often just what a company requires, the breadth of experience and wisdom offered by a pair of equally guided leaders can also have its advantages. “As long as there is cooperation, a pair will bring greater assets than can come from one person’s intellect,” adds Bower.

“Whether we’re talking about socks or stocks, I like buying quality merchandise when it is marked down.”  – Warren Buffett, chairman and CEO, Berkshire Hathaway

Today’s activist shareholders urge boards and CEOs to seek a second opinion or appoint a devil’s advocate that can result in what some believe is a bifurcated structure, as evidenced by the recent push for splitting the roles of CEO and chairman. One of the common arguments for not splitting the roles is that it creates confusion about exactly who is in charge. Another is that it hinders the company’s leadership to communicate with one, clear voice. Yet another is that the two get in each other’s way, one reining in the other, forcing a compromised and dulled strategy. However, great business duos learn to sidestep these traps and work together for the greater good of the organization. They improve each other’s ideas without watering them down. They move in concert without stepping on each other’s toes.

The question of what is the optimal executive leadership structure is one the board must answer and be answerable for (though many of the following examples took place before the boardroom had the significance it has today); a director could not find a better starting place from which to view the issue than by looking at the following examples of tandem business success.

“Communication is the cornerstone,” says Belmont University Prof. Jeff Cornwall, who studies business organizational structure. “Successful partners are able to feel comfortable tackling difficult issues without being afraid of hurting each other’s feelings.” Certainly, when addressing high-impact challenges on a day-to-day basis, the best pairings have had a tendency to avoid sugarcoating the issues at hand, and a no-nonsense approach is also required. Says Cornwall, “Partners must have a similar work ethic, and they should have similar values, but not necessarily similar personalities.” Such advice, along with the examples offered below, affirms John Rockefeller’s maxim that friendship founded on business is preferable to business based on friendship. With such an appropriately sober attitude in mind—and with the implicit advice offered by history’s great duos—one should move confidently in building a capable leadership team.

Warren Buffett and Charlie Munger: Berkshire Hathaway
The partnership between Warren Buffett and Charlie Munger has been well documented throughout the pair’s 50-year professional relationship, but for traders, investors, and general profit-seekers at large, their formula for success remains elusive. In their leading roles at Berkshire Hathaway, the two have led investors (and themselves) to steady returns virtually unparalleled in the investment community. Their methods, as the two attest, are deceptively simple, yet their successes have been without peer.

Buffett and Munger are unified in their ability to generate profit for investors in their funds, and the two men share similar investing values that revolve around the simple tactic of targeting undervalued assets and obtaining them. As Chairman and CEO Buffett put it in last year’s letter to shareholders, “Whether we’re talking about socks or stocks, I like buying quality merchandise when it is marked down.” However, the individuals behind Berkshire’s success have demonstrated their unique characters, even as they have waged a common investment crusade. Buffett, with his tireless, common-sense approach to investing, his emphasis on wise governance, and his seemingly infinite humor and wisdom, is the prototype for would-be fund kings. His annual shareholder letters offer up world-class insight into the methods by which steady returns are generated, all tinged with the folksy warmth that is no small part of the man’s appeal.

Many TARP recipients are now scrambling to pay back their share of the $700 billion bailout to escape further government meddling. Some banks are believed to be under an undisclosed regulatory sanction that requires them to revamp their boards and focus on risk and liquidity management. Since Bank of America signed on to TARP, four directors have resigned from its board and been replaced, likely with government input.

Recently, Citigroup reshuffled its senior executives, including the removal of CFO Edward Kelly—changes made while under pressure from the Treasury and after discussions between regulators and Citigroup Chairman Richard Parsons. Citi’s chief accountant, John Gerspach, is now the bank’s fifth CFO in five years. Citi also replaced four members of its board since signing on to TARP. Only three of AIG’s original 11-member board remain in place.

“You can at least see an attempt to make government regulators happier,” reflects Jaidev Iyer, managing director of the Global Association of Risk Professionals. “But there is a difference between making changes to appease regulators and making fundamental changes to your board and governance practices.”

“The government is working behind the scenes—but they will get their money back,” assures Simmons, who believes many of the casualties of the financial crisis will need to revamp their boards whether the government says to or not. Says Simmons: “The market is going to demand it.”

Chrysler named five new directors to its board: George F. J. Gosbee, chairman and president of Tristone Capital; Douglas Steenland, former CEO of Northwest Airlines; Scott Stuart, a founding partner of Sageview Capital; Ronald L. Thompson, chairman of the board of trustees for Teachers Insurance and Annuity Association; and Stephen Wolf, chairman of R.R. Donnelley & Sons.

American International Group’s annual meeting resulted in the re-election of Dennis Dammerman, former vice chairman of the board of General Electric; George Miles, CEO of WQED Multimedia; Suzanne Nora Johnson, former vice chairman of Goldman Sachs; and Morris Offit, chairman of Offit Capital Advisors. Liddy said he will step down as CEO as soon as a replacement is found.

Ken C. Hicks has been named Foot Locker’s new CEO. Hicks will succeed Matthew D. Serra, who has been the company’s CEO since March 2001. Serra will continue as the company’s chairman until his planned retirement next year.

Trex Company named Richard E. Posey to its board. Posey has served as chief executive of Moen Inc., a faucet manufacturer, and Hamilton Beach/Proctor Silex.

Bank of America revamped its board by electing four new directors: Susan Bies, William Boardman, Paul Jones, and Donald Powell. Bies previously served on the SEC’s advisory committee. Boardman served as chairman of Visa International until his retirement in 2005. Jones is currently an attorney at law firm Balch & Bingham. Powell is a director of Stone Energy.

Biogen Idec confirmed two of billionaire activist Carl Icahn’s picks to its board: Richard Mulligan, a professor of genetics at Harvard Medical School and director of the Harvard Gene Therapy Initiative; and Alex Denner, a managing director at Icahn Partners.

Jeff Huber, senior vice president of engineering at Google, has joined Electronic Arts’ board. Huber was in charge of technology development for Google’s AdWords and AdSense, as well as Google Apps. Prior to Google, he served in a number of management roles at eBay and Excite@Home.

David L. Calhoun has been named to Boeing’s board. Calhoun is CEO of The Nielsen Company. Prior to his work at Nielsen, Calhoun spent more than 25 years at General Electric.

Sonoa Systems named Tsvi Gal to its board. Gal is a general partner at Exigen Capital and previously served as Deutsche Bank’s Investment Bank and Assessment Management’s CTO.

Anne Egger has been appointed to Optical Sciences’ board. Egger has been working with Electro-Optic Sciences as a consultant since her retirement earlier this year.

Michael Gelmon and Cory Gelmon have been named to Safeguard Security Holdings’ board. Michael Gelmon has replaced Tom Montgomery as chairman of the firm and Cory Gelmon has been elected director and appointed new CFO.

Best Buy’s Brad Anderson will retire as the company’s CEO. Brian Dunn is believed to be Anderson’s successor. Dunn currently serves as the company’s president and COO.

E*Trade Financial named Kenneth C. Griffin, founder and CEO of Citadel Investment, to its board. Griffin currently sits on the Advisory Council for Chicago 2016, working to bring the 2016 Olympic Games to the Windy City.

George E. Minnich has been appointed to Kaman’s board. Minnich retired as senior vice president and CFO of ITT in 2007.

MarineMax appointed Russell J. Knittel to its board. Knittel has been executive vice president of Synaptics since 2007, and CFO  since 2001.

Ray Powers has been appointed to MediaG3’s board. He served as COO and executive vice president of International Communications, a wholesale carrier that owned nearly 460 wireless transmission sites in the U.S.

Robert Half International appointed Barbara J. Novogradac to its board. Novogradac is currently president of Novogradac Investment Company, a private real estate investment company.

FedEx elected Susan C. Schwab, U.S. Trade Representative from 2006 to 2009, to its board. Schwab is currently a professor at the University of Maryland’s School of Public Policy.

Qualys CEO Philippe Courtot has been elected to Tech-America’s board. Courtot served on the board of the Cyber Security Industry Alliance (CSIA). He previously was chairman and CEO of Signio, an electronic payment start-up that he repositioned to become a significant e-commerce player.

James K. Brewington has been named to Sonus Network’s board. Brewington retired as president of Developing Markets at Lucent Technologies in 2007.

Boston Scientific CEO James Tobin will leave the medical-device maker. Tobin will be succeeded by Raymond Elliott, the former CEO of orthopedics maker Zimmer Holdings.

ScanSafe, a provider of Software as a Service web security, appointed Bernard Liautaud to its board. Liautaud was founder and CEO of Business Objects, an enterprise software company.

John McCartney was elected to Covance’s board. McCartney currently serves as chairman of the board of A.M. Castle, a provider of products, services, and supply chain solutions. McCartney previously served as president and COO of U.S. Robotics.

George E. Minnich has been named to Kaman’s board. He retired as chief financial officer from ITT in 2007.

In keeping with our Dynamic Duos cover, I wanted to relate an anecdote that Cab Woodward, Hal Geneen and Rand Araskog’s right-hand man at the famed ITT, once told me: “The best CEO in business is ABC Broadcasting’s Tom Murphy and Dan Burke.” The singular verb was intentional. Murph, as his friends call him, would have added: “Although our form is corporate, our attitude is partnership,” if his close friend, Warren Buffett, had not said it first. Incidentally, Buffett was offered a seat on Tom’s board back in the Capital Cities days, but he declined. Today, Murphy is a Berkshire Hathaway director, which is Buffett-style poetic justice.

Murphy and his longtime partner, alter ego, sounding board, and co-CEO, Burke, singularly built Cap Cities into the dominant and most profitable broadcaster in America, prior to its merging with ABC and later with Michael Eisner’s Disney. Just to add to business lore, that deal was consummated at Allen & Co’s. Sun Valley media fest.
Tom’s philosophy was based on three well-defined and vigorously applied tenets: fiscal responsibility, lean decentralized management, and a corporate conscience. Burke, the president of Cap Cities/ABC, was also big on morale. He is known for saying: “I’ve never met anyone who tired of compliments.”

Free may not be the most profitable way to do business, but it may soon be the only way.

Free-for-All

Chris Anderson just ruined our day. If you are familiar with his recent book, Free: The Future of a Radical Price, you may think I am referring to anyone who owns, runs, or works for a media company. I don’t mean that. I mean all of us. Media is just the first to get whacked. And Google is just the first salvo. Free says what we already know: We like certain things, we like them more when they are cheap, and we like them most when they are free. We will even spend precious time finding free.

What does this mean for boards? If you are involved in the digital world, it means outright giving things away and looking for new ways to transact or get paid. The problem is that in many cases it is not clear that these new ways even exist yet. If you are selling something tangible, you may get paid for it, but the shipping, service, or global logistics will soon be free. Whither the margins in that scenario?

Fear and Loathing on the Shuttle (Our Fear, Their Loathing)

Recently, a woman dressed for casual success—crushed velour jacket, Louis Vuitton bag slung artfully over her shoulder—waltzed into the first-class line of the TSA checkpoint. All of the business mortals on the coach line were shuttling to New York or Washington. As I looked around, I saw a noticeable expression on the faces of the bystanders watching while she undid her handbag and removed three trays on which to place her baubles and valuables: Loathing. Zhou Enlai was supposed to have informed Henry Kissinger, when asked about the impact of the French Revolution, “It is too early too tell.” It is not too early to tell the impact of the Crisis of 2008.

Then…on a recent afternoon I returned home on a flight from New York and noticed a Massachusetts Congressman sitting in the next row. It was one of those unbearably humid August days. He was working his way through a sandwich he had bought at the airport concession and was steeped in paperwork. Congressmen spend their time on the TSA line just as we do. They suffer the outrages and the humblings of modern air travel. Their flights get cancelled. Only they have to fly to their home districts most weekends. So should we wonder what they felt when the automotive executives came hat in hand via Air-GM, Ford, and Chrysler to ask the Honorable Henry Waxman for a government bailout? They were probably thinking about the soggy sandwiches and irritable flight attendants in their own immediate future.

The recently-announced deal between the two companies will have Microsoft using its search technology to back Yahoo’s advertising draw, with Microsoft paying 88 percent of the revenue it gains from the searches to its business partner. Microsoft can also integrate Yahoo’s search capabilities into its own should it desire.

Microsoft will also pay Yahoo $150 million over three years.

The partnership between the two tech titans is meant as a move against Google, which has had impressive success with both search and advertising, in addition to a number of other technological fields.

Yahoo and Microsoft could announce a deal as early as next week, as Yahoo CEO Carol Bartz said her company will join forces only if the price is right.

The alliance was first proposed in 2006, but Yahoo’s two previous CEOs, Terry Semel and Jerry Yang—could not seal the deal.

Analysts believe that should this round of talks be successful, Yahoo will receive a lumps sum of cash and billions of dollars in guaranteed payments spread over years while reaping annual savings of at least $500 million from not having to run its own search engine.

Yahoo’s search engine currently holds a nearly 20 percent share of the U.S. search market, trailing to Google’s steadfast 65 percent.

Google is preparing to unveil its own operating system, based on its Chrome browser, to directly compete with Microsoft, reports The New York Times.

However, Google’s announcement may further complicate its relationship with Apple. Regulators at the Federal Trade Commission have been investigating whether Google and Apple are violating antitrust laws by sharing two board members: Eric E. Schmidt, CEO of Google, and Arthur D. Levinson, CEO of Genentech.

The investigation has been ongoing and this latest development could raise more questions for regulators looking into the relationship.

Google says it will offer the Chrome operating system free to netbook makers under an open-source license. That would likely increase traffic to Google’s search engine and might allow them to search the Internet faster. Antitrust lawyers say the FTC will examine the collaboration between the companies using a different standard, Section 5 of the FTC Act, which prohibits “unfair methods of competition.”

One topic of question is whether the large wireless companies are behaving unfairly by locking up popular phones—such as Apple’s iPhone—through exclusive hardware contracts, thus shutting out smaller rivals.

AT&T and Verizon hold a combined 60 percent of the telecommunications market, which includes 90 million landlines and over 160 million wireless subscribers.

The DoJ has demonstrated that it is looking to reverse the softer antitrust rules of the Bush administration, with Antitrust Chief Christine Varney having explicitly claimed so. The DoJ is also investigating the health care and agricultural industries, as well as Internet search giant Google.

Sources within the Justice Department say that the investigation centers around whether these tech companies made agreements not to actively recruit employees from one another. The regulator has issued formal requests for key documents and information relating to the potential antitrust violations.

The investigation is in an early stage, according to sources, and an example of the current administration’s prioritizing of antitrust concerns. Obama’s assistant attorney general, Christine Varney, issued a speech last month that effectively reversed the Bush administration’s lenient policies towards antitrust laws.

“As antitrust enforcers, we cannot sit on the sidelines any longer, both in terms of enforcing the antitrust laws and contribution to sound competition policy as part of our nation’s economic strategy,” said Varney.

Sources within the Justice Department say that the investigation centers around whether these tech companies made agreements not to actively recruit employees from one another. The regulator has issued formal requests for key documents and information relating to the potential antitrust violations.

The investigation is in an early stage, according to sources, and an example of the current administration’s prioritizing of antitrust concerns. Obama’s assistant attorney general, Christine Varney, issued a speech last month that effectively reversed the Bush administration’s lenient policies towards antitrust laws.

“As antitrust enforcers, we cannot sit on the sidelines any longer, both in terms of enforcing the antitrust laws and contribution to sound competition policy as part of our nation’s economic strategy,” said Varney.

The overlapping service of the directors raised a rarely cited provision of the 1914 Clayton Antitrust Act, Section 8, which forbids “interlocking directorates” among companies that share market space on the belief that such an overlap would inhibit competition.

“The standard worry of Section 8,” says Howard University Law Professor Andrew I. Gavil, “is that the common director will gain information from the two rivals and that will become a funnel, which will allow the two companies to combine their strategies.” Gavil and others note that Google and Apple participate in the phone, mobile markets, and web browser markets, and that improper sharing of information could harm competition in these markets.

Schmidt doubts the veracity of any potential allegations, claiming that he excuses himself from discussions of Apple’s iPhone, a product category where Google and Apple compete most closely. “I don’t think Google sees Apple as a primary competitor,” said Schmidt at a May 7 press conference before Google’s annual general meeting. Carr & Ferrell attorney Gary Reback agrees with the CEO’s prognosis. “There isn’t much of a possibility of this particular issue being taken to court. At the very worst, [Schmidt and Levinson] will just have to resign from the Apple board.”