Inharmonious: exploring the board-chief executive dynamic

October 2026  |  FEATURE | BOARDROOM INTELLIGENCE

Financier Worldwide Magazine

October 2026 Issue

Strong internal relationships are the lifeblood of any company. Acting as the hidden wiring that drives an effective workplace, they promote trust, collaboration, innovation, alignment with organisational goals and sustainable growth.

Conversely, fragile relationships, particularly at the top table, can create serious challenges for the dynamic between the board and chief executive.

Board dysfunction is a longstanding problem for organisations of all types and sizes. Many directors and chief executives rate the effectiveness of their boards poorly. Research suggests that as many as 25 percent of boards are dysfunctional – a weakness that, if left unchecked, can quickly erode business value.

“From FTSE boards to small and medium-sized enterprises to charities, all boards can suffer dysfunction,” suggests Sarah Pierman, chief executive of Dynamic Boards. “If the board-chief executive relationship is not straight talking, honest and able to provide mutual support, the board will suffer dysfunction, even if the other board members are fulfilling their duties.

“That dysfunction can manifest in many ways,” she continues. “You might see a chief executive that feels beaten down by the board to the point that they lose their ability to confidently lead, turning up to board meetings visibly deflated, bracing for challenges or even calls for their removal. It is such a pivotal relationship, and as with all relationships, understanding individual roles is key.”

Minimising dysfunction

According to the Forbes analysis ‘Board Dysfunction Is On The Rise’, there are four steps every organisation can take to minimise dysfunction and establish a healthy working relationship between the chief executive and the board.

The first is setting clear expectations. The roles of management and the board should be clearly defined: management manages and the board governs. However, many people join boards without a full understanding of what the role entails or any formal training. In addition, many directors are current or former chief executives who are accustomed to running organisations rather than serving in a governance capacity.

“Most board members and chief executives have had no training on how they operate in their respective roles as directors and leaders of the business,” concurs Ms Pierman. “If all boards invested in suitable training and development for their chairs and chief executives, we could see far more reflective and effective practice.”

Accountability is another important factor. Effective chief executives minimise surprises and ensure expectations are clearly communicated. When this happens, both the chief executive and the board can hold each other accountable.

To fulfil their duties diligently and act in the best interests of shareholders, directors expect regular communication from the chief executive. This includes updates on operational performance, strategic direction, leadership and talent development, and succession planning.

“Boards that operate as a well-oiled machine, with a clear understanding of all parties’ roles and responsibilities, spend less energy on governance basics, freeing up more time for the board to focus on driving performance over the long term,” says Ms Pierman. “Investing time in relationship building helps ensure that all board members, and the chief executive, know and appreciate each other’s skills, experiences and perspectives.”

A further consideration is recognising that the board does not run the company. While directors should challenge management, when necessary, they should not overstep into day-to-day operations. Governance requires oversight and scrutiny, not direct involvement in managing business activities.

The final step is creating alignment in increasingly polarised times. Political and social divisions can create tensions within boards on a range of economic, social and geopolitical issues. Values-based leaders, however, seek to understand issues from multiple perspectives.

At the same time, boards and chief executives must recognise that they do not need to make public statements on every issue, particularly when matters fall outside the organisation’s area of expertise.

“Instead of muddling through, chief executives and their boards need to work together to craft relationships that create opportunities for honest and at times challenging discussions, alongside much needed support,” adds Ms Pierman.

Mutually accountable

Addressing board dysfunction and mitigating conflict can seem daunting, but achieving boardroom harmony is essential for organisational success.

“However senior or experienced the chief executive and other board members are, human behaviour means relationships take work, and understanding how these roles interact requires regular investment,” says Ms Pierman. “Expecting the relationship to ‘just work’ is foolhardy.

“Only when chief executives and board members understand their respective roles, have clear expectations, maintain open dialogue and are mutually accountable can they forge a strong working relationship,” she adds.

As boards face mounting scrutiny from investors, regulators and stakeholders, organisations should treat board effectiveness as more than a governance exercise. Regular independent board evaluations, structured development programmes and dedicated time for horizon-scanning can help ensure directors remain equipped to navigate complex commercial and societal challenges.

Equally important is fostering a culture where constructive challenge is welcomed rather than avoided. Companies that encourage robust debate, diverse viewpoints and evidence-based decision making tend to be better at spotting risks, seizing opportunities and adapting to change.

© Financier Worldwide

BY

Fraser Tennant