What is the Ideal Number of Direct Reports for a CEO?

A (somewhat dated) 2010 study by Bain & Company found that organizations where CEOs manage 6 to 7 direct reports tend to outperform the market.

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Meanwhile, NVIDIA’s CEO, Jensen Huang, defies typical management norms with his 60 direct reports and aversion to 1:1s.

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So, which is ideal: 6 or 60?

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In short, it depends. And the benchmarks vary largely by stage. Let’s dive into the data.

CEO Span of Control Benchmarks

Our data science team analyzed real-time CEO span of control benchmarks across 5,922 Pave customers. A key caveat is that these customers skew heavily towards the tech sector.

The larger the company, the more direct reports a CEO tends to have. At smaller companies with up to 50 employees, the median number direct reports for the CEO ranges from 3 to 6. But as companies grow, so does the CEO’s span of control. At companies with 3,000+ employees, the median number of direct reports rises to 14.

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Additionally, the spreads between 25th and 75th percentiles are quite large (e.g. 8 to 17 direct reports at companies with 1,001 to 3,000 employees). This suggests that there is no one-size-fits-all approach—just pros and cons to different org chart strategies.

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Pros and Cons for CEOs

Let’s provide a brief analysis of these findings. First, let’s analyze what it can mean when a CEO has fewer direct reports.

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Pros: 

• The CEO can focus on a smaller number of high-importance initiatives related to strategy, vision, and growth rather than nitty-gritty operational details.

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Cons: 

• The CEO can have less access to front-line knowledge. 
• Also, in some cases, a more hierarchical org chart can slow down communication.
• Lastly, the CEO may have less direct impact across departments, which can lead to a weaker alignment with the overall company culture and vision.

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What about when a CEO has more direct reports? Here is what I see as the main pros and cons.

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Pros:

• The CEO can oversee a larger number of functions and priorities which can in some cases unlock faster decision-making and communication. 
• To some extent, this org chart style is perhaps more conducive to Paul Graham’s “founder mode”, depending on your interpretation of the viral essay.

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Cons: 

• More direct reports can overburden the CEO and increase the “CEO as a bottleneck” anti-pattern, which can slow down company decision making and progress.

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What do you think is the optimal number of direct reports for a CEO to drive results?

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