Friction between the board of directors and the CEO can cause one of the most delicate and complex forms of conflict in an organisation. If not managed properly, this conflict can jeopardise the organisation’s ability to function effectively. The board and the CEO play fundamentally different roles, but they must work in harmony to achieve the company’s goals. When they don’t, the business can become stuck and find itself unable to move forwards.

According to KPMG, rapid technological change, geopolitical uncertainty and pressure from investors can all put strain on the relationship between the board and the CEO.

At the heart of this relationship is mutual trust. A positive and productive board-CEO dynamic doesn’t guarantee success, but it can create a foundation that facilitates smooth decision-making, minimises obstacles, and allows the organisation to operate more effectively.

Understanding the nature of board-CEO conflict

Conflicts between the board and the CEO are often more about human relationships than governance issues. While governance structures are important, the way people interact in the boardroom plays a significant role in determining the effectiveness of the board-CEO relationship.

Here are some key insights from CEOs, based on a study published in Harvard Business Review:

1. CEOs value having a strong relationship with the board: Contrary to common belief, CEOs aren’t looking to weaken the board’s authority. They understand that a strong partnership with the board will create more value for the organisation.
2. Open, honest conversations are essential: Tension is natural, but it can be eased through candid discussions between the board and the CEO. When there’s mutual trust, these conversations flow more freely, leading to greater clarity on both sides.
3. The best relationships are built on respect: Successful board-CEO partnerships are grounded in mutual respect, trust, and a shared commitment to the organisation’s success.

Everyone involved in this vital relationship is responsible for ensuring it remains healthy: from the CEO to the board chair to each individual board member.

The role of directors in maintaining a positive relationship

Directors play a critical role in nurturing the board-CEO relationship. They must balance supporting the CEO with holding them accountable. According to Russell Reynolds Associates, on average board-related activities take up 25% of a CEO’s time in their first year.

First-time CEOs will also be shifting from having one boss to multiple bosses who aren’t involved in the everyday running of the business. Directors should recognise the challenges the CEO faces in this respect and support them in their position. They should encourage the CEO to make building relationships with them a priority.

Directors can contribute to a strong board-CEO relationship in the following ways:

• Provide guidance: Directors should offer advice and mentorship to the CEO, helping them to navigate complex strategic decisions and translate high-level strategy into actionable plans.
• Ask tough questions: Directors must have the courage to ask probing questions about decisions that could impact the organisation’s direction, ensuring transparency and accountability.
• Act when necessary: Directors should intervene when needed, particularly in crises or when their fiduciary duties demand that they act.
• Stay engaged: Board members should be fully committed to their role, bringing energy and focus to board discussions and ensuring that their involvement is meaningful.

The special role of the board chair

Among all board members, the chair, as the non-executive counterpart to the CEO, has the most significant role in fostering a strong relationship with them. In addition to fulfilling the responsibilities shared by all directors, the chair is responsible for the following areas:

• Facilitating communication: The board chair should create an open and transparent dialogue between the CEO and the board, ensuring that communication is clear and frequent.
• Building management relationships: The chair should work to establish strong relationships not only with the CEO but also with key members of the management team.
• Respecting the CEO’s role in strategy: While the board approves the organisation’s strategy, the chair must respect the CEO’s responsibility for developing it.
• Owning the succession process: The chair should take the lead in managing CEO succession planning, ensuring that the organisation is well-prepared for leadership transitions.

According to KPMG, the lead director should review the issues the CEO is managing and determine whether any of these should be raised with the board or one of its committees, as well as which board director might have relevant experience of that issue.

The CEO’s role in fostering a positive relationship with the board

The CEO is equally responsible for maintaining a productive relationship with the board. A CEO should recognise that the board’s role is not just to provide oversight but also to offer valuable perspectives and insights.

According to KPMG, CEOs want to see the board as an asset that adds value. This expectation should be made clear to all directors.

The CEO may face more pressure from positions below them than the board directors above them, but one of the worst things they can do in this situation is to avoid or ignore the board, say Russell Reynolds Associates.

One of Spencer Stuart’s findings is that many CEOs underestimate the importance of understanding the board’s interests and fail to develop and maintain a relationship with them. They argue that it is the questions the CEO asks, how they ask them and the answers they give which demonstrate that they intend to make their own mark.

The CEO’s responsibilities in maintaining a productive relationship with the board include the following:
• Valuing the board’s input: CEOs should respect the unique skills and perspectives that board members bring, which complement the CEO’s own expertise.
• Balancing strong opinions with openness: While it’s important for a CEO to present a clear strategic vision, they must also be open to considering the board’s views and feedback.
• Proactive communication: CEOs need to keep the board informed of key developments, particularly regarding the impacts and risks of strategic decisions. Surprises undermine trust. Celia Huber, a senior partner at McKinsey & Company, says one CEO she knows texts their board with hot topics. Other options to maintain regular contact with the board could be to send out monthly board memos or hold regular off-site board meetings.
• Seeking informal input: The CEO should seek informal feedback and guidance from directors to build strong relationships and address potential disagreements early. Ideally, they will make the chair aware of their plans to do so before approaching individual board members.
• Supporting board independence: The CEO should accept the board’s authority in selecting their successor and actively support the succession process.
• Introducing the management team: The CEO should facilitate informal connections between the board and senior management, allowing directors to provide advice to, and get to know, the leaders of the organisation.

Shared responsibilities between the board and the CEO

Both the board and the CEO share several important responsibilities that underpin a healthy working relationship. These include the following:

• Acting in the organisation’s best interests: Everyone involved must prioritise the organisation’s goals and stakeholders’ needs above personal interests.
• Setting clear expectations: Establish clear, mutually agreed-upon expectations for both the board and the CEO.
• Maintaining independent relationships: While it’s important to build strong working relationships, the board must retain its independence to provide objective oversight.
• Building trust: The foundation of any effective relationship is trust, which is built on honesty, transparency and mutual respect.
• Remaining humble: Everyone involved should approach their roles with humility, recognising that their ideas and decisions will be challenged—and that’s part of a healthy process.

Best practices to strengthen board-CEO relationships

Several key practices can help ensure that the relationship between the board and the CEO remains strong and productive. These include the following:

1. Board orientation: An effective onboarding process helps new board members understand their role and responsibilities, ensuring they are prepared to work constructively with the CEO.
2. Documented roles: Having clearly defined roles for both the board and the CEO ensures there’s no confusion about governance responsibilities.
3. CEO evaluations: Conducting annual evaluations of the CEO based on clear, agreed-upon objectives helps maintain accountability and prevents conflicts from escalating.
4. Strategic focus: The board should concentrate on high-level strategy and avoid getting too involved in operational details.
5. Board evaluations: Regular board self-assessments should include an evaluation of the board-CEO relationship, ensuring that tensions are identified and addressed early.

Navigating natural tensions between the board and CEO

It’s important to recognise that some level of tension between the board and the CEO is natural. The lines between board oversight and executive management are often blurred, which can lead to friction. Moreover, as the organisation evolves, so do the roles and expectations of the board and CEO, introducing further complexities.

Changes in organisational needs, shifts in governance practices, or evolving regulatory requirements can all introduce tension. When this tension is managed constructively, it can lead to better outcomes. But when it is ignored or allowed to fester, it can erode trust and lead to a breakdown in the board-CEO relationship.

Strategies for addressing board-CEO conflicts

When tensions escalate into conflict, it’s critical to address the situation quickly and thoughtfully. Steps that can be taken to resolve board-CEO conflicts include the following:

• Open dialogue: Start by discussing the issues with the board chair or CEO directly to understand their perspective and work towards a solution.
• Acknowledge the tension: Sometimes simply naming the issue allows both sides to acknowledge and address the root cause of the conflict.
• Conduct self-assessments: A board self-assessment can help clarify roles and improve the relationship between the board and the CEO.
• Seek outside help: In particularly tense situations, bringing in outside advisers, mediators, or governance experts can help diffuse the situation and provide a path forwards.

The relationship between the board and the CEO is one of the most critical factors in an organisation’s success. While conflict is inevitable, it doesn’t have to be detrimental. By fostering open communication, mutual trust and respect, the board and the CEO can work together to navigate challenges, ensuring the organisation remains strong, resilient and aligned with its strategic goals.

Further reading:

CEO Insights: forging stronger CEO-board partnerships – McKinsey & Company
How boards and new CEOs can establish a strong relationship – Russell Reynolds Associates
Building the CEO Board relationship – Spencer Stuart
Under pressure: Maintaining a strong board/CEO relationship – KPMG (India)
Director Reference Guide: Navigating Conflict in the Boardroom – Board Agenda