In the aftermath of Credit Suisse’s losses linked to Archegos Capital Management, Axel Lehmann, the bank’s former chair, reflected that warning signs inside organisations can work like dashboard lights: easy to overlook, but potentially pointing to something far more serious. The lesson for boards is that warning signs often exist within an organisation before directors see them clearly. The challenge is to create an environment where the right signals can travel upwards clearly, safely and early enough — and boards have an important role in creating those conditions.

That question sits at the heart of research interviews I have been conducting with chairs and non-executive directors of listed companies in continental Europe, the UK and North America. The interviews explored how boards interact with senior executives below board level, how those interactions shape board judgement, and what governance risks arise when directors seek insight beyond the CEO and top team.

The findings point to a simple but under-examined conclusion: boards do not form judgement through formal reporting alone. They do so through a wider information architecture made up of papers, presentations, committee work, site visits, external signals, informal conversations and repeated exposure to the people who understand what is really happening in the business.

Good governance design

Boards are expected to oversee the issues that matter most to the company: strategy, leadership, succession, culture, people and risk. Yet, apart from executive directors, they see relatively little organisational reality directly. They work through representations: board papers, dashboards, presentations, committee reports, management narratives, assurance reports and carefully curated interactions.

This is not a defect in governance—it is part of its design. Boards are not meant to be embedded in day-to-day management. Their distance from operations protects independence, perspective and accountability. But it also creates structural information asymmetry. The board depends heavily on the CEO and top team, while many of the people closest to operational reality sit several layers below the boardroom and are not always recognised as part of the information architecture.

The result is a familiar tension. Boards often receive a great deal of information, but not always the context they need to interpret it. More pages in the board pack do not necessarily produce better judgement. One chair described facing thousands of pages of audit committee material, yet still relying on direct conversations with management and executives below board level to understand the priorities, context and issues that required attention. The challenge was making sense of the information available.

A broader remit

This is where the role of senior executives below board level deserves more attention. They are often treated as occasional presenters, functional experts, succession candidates or people the board meets during site visits. Those roles are important, but too narrow. In effective board practice, senior executives are part of the board’s information architecture: the formal and informal system through which directors build their understanding of the organisation, its leaders, its risks and its external environment.

Senior executives carry signals the board may otherwise miss. They are closer to implementation, customer realities, employee sentiment, operational constraints, risk culture and the practical consequences of strategy. They can help the board understand whether the formal narrative is aligned with what is happening inside the business. They can also reveal whether the organisation has the capability, confidence and leadership depth to deliver what the board is being asked to approve.

This does not mean boards should bypass the CEO or create alternative reporting lines for senior executives. The value of board interaction with senior executives is more subtle. Across the interviews, three purposes came through consistently.

The value of interaction

First, these interactions help boards surface weak signals. Weak signals rarely arrive as fully formed board issues. They appear as hesitation, inconsistency, overconfidence, defensive answers, unexplained delay, or operational detail that does not quite fit the formal narrative. Several chairs described situations in which people below board level had seen something important before it became visible to the board. As one put it: “Formal channels work, until they don’t.”

Second, these interactions help boards triangulate organisational reality. A board paper may be accurate and still incomplete. A presentation may be polished and still leave directors uncertain about execution risk. Speaking directly, and where appropriate more informally, to the people responsible for strategy, risk, technology, operations or major transactions can help directors test whether the CEO narrative, committee reporting, external signals and operational reality point in the same direction.

Third, these interactions strengthen board challenge. The point is not for directors to challenge senior executives informally in corridors, dinners or site visits. The point is that what directors hear and observe should improve their understanding and the quality of formal challenge later, in the boardroom or in committees. Better informal understanding leads to sharper formal questions.

That distinction matters. Board interaction with senior executives is not simply an access question. It is a trust and culture question. A recurring theme in the interviews was that openness and frequency of interaction below board level reveal something fundamental about the governance system. Confident CEOs often see purposeful board exposure to the next layer of leadership as helpful. It allows the board to understand the business better, gives talented executives visibility and can strengthen the quality of discussion. Defensive leaders tend to narrow, control or stage-manage that access.

Where the chair sits

The chair’s posture is just as important. Some chairs regard it as part of their role to understand the organisation beyond the top team, particularly in complex businesses or during periods of transformation, crisis or leadership transition. Others deliberately keep greater distance to avoid the perception of interference. Neither model is automatically right. Context matters: sector, ownership structure, regulation, board system, company size, committee design and board capacity (particularly that of the chair) all shape what is appropriate and feasible. A critical variable that came up frequently is time commitment. One chair put it bluntly: “If you want insight, you need capacity.”

One point is clear: whom the board is allowed to hear from is itself a signal. If directors only ever hear a polished top-team narrative, that tells them something about the organisation. If senior executives are trusted to present, explain trade-offs, discuss uncertainty and engage openly with the board, including outside formal board meetings, that tells them something too.

Both setting and frequency matter. Boards do not form judgement from isolated encounters. One-off presentations often show competence in presenting, while repeated exposure shows patterns: candour, judgement, grip, defensiveness, openness to challenge and ability to prioritise. One chair captured the value of informal time memorably: “You can only be on message for about 90 minutes.” Committees, deep dives, site visits, structured talent exposure and less formal interactions can therefore be valuable because they allow directors to see executives over time and in different settings.

There are real risks, too: board members can overweight anecdote, reward confidence over competence, or mistake a single conversation for evidence. Executives may use informal contact to seek sponsorship, advance internal politics or bypass their reporting line. Directors may unintentionally undermine the CEO or become drawn into management. None of this helps governance.

Effective boards tend to deal with this through common understanding rather than detailed rules or formal policies. The chair, CEO and board need shared expectations about interactions with executives below board level. Directors, in turn, need clarity about purpose, visibility and follow-up when interacting with senior executives. Is the interaction intended to provide information, test assumptions, understand talent, explore a risk, offer perspective or handle a concern? Does the chair or CEO know about it? Should the insight be brought back into a committee or board meeting? Is this a confidential sounding-board conversation, or does it require formal escalation?

Stick to the task

Several interviewees emphasised that directors must remember their role. They are not there to fix operational issues or become alternative managers. One chair described the NED role in these conversations as being “a sponge”: listening, absorbing and understanding, before deciding whether and how the issue should be brought back into formal governance.

For senior executives, the message is equally important. Board interaction is not a performance ritual. It is an opportunity to improve signal quality. Directors value clarity about priorities, trade-offs, risks and judgement. They do not need every operational detail. They need help understanding what is strategic, what is uncertain, what is changing, and what the board should be asking itself.

Where boards fail, it is rarely because no information exists. They fail because the right signals do not reach them clearly enough, early enough or in the right context. Senior executives below board level are therefore not peripheral to board effectiveness. They are part of the information architecture through which boards form judgement.

Used well, interaction with senior executives helps boards hear what board packs cannot. Used badly, it creates confusion and governance risk. The difference lies in trust, culture and discipline.

Hans-Christoph Hirt is adjunct professor for strategic governance and investor stewardship at IMD