Strategies for Managing Conflict and Disagreement in the Boardroom

Reprinted with permission from the National Association of Corporate Directors after originally appearing as a Directorship online article on September 17, 2024.

Boards operate in a complex and dynamic world where they face various challenges and opportunities that require strategic decision-making and effective communication. Directors will inevitably encounter challenging discussions with their fellow directors, CEOs, or various stakeholders across a range of delicate subjects, such as performance, succession planning, ethics, and governance. When discussing these subjects, disagreements and conflict are bound to arise. How can board chairs adeptly navigate these situations to promote constructive dialogue and consensus among everyone involved?

Establish Policies, Systems, and Processes

It is critical that boards have a mechanism in place to surface any issues or questions before they escalate into conflicts. Board chairs should consider utilizing skill-set matrices to align the board composition with the business focus and hold independent director-only meetings to discuss any concerns or feedback. The best boards are proactive in seeking feedback from their members in the context of the skills and responsibilities that each director brings to the table.

In one recent example, a board member approaching a board’s mandatory term limit thought that fellow directors would make an exception. By having good governance practices established and refusing to offer exceptions along the way, this board chair was able to navigate the difficult conversation with greater ease than had those systems not been in place.

Board chairs can also leverage executive sessions or forums where board members can come together and share their views, even if they disagree. By having these practices in place, board chairs can ensure that there are no surprises or shocks in board meetings and that everyone is on the same page about the agenda and the objectives. In the same way that the best CEOs create forums to talk about the “how” of the team—not just the “what” — the best board chairs also focus on the types of behaviors that are expected of the directors.

Prepare for the Conversation Before It Occurs

When it comes to delivering a difficult message, such as asking an underperforming director to step down or informing a CEO of a negative evaluation, the role of the board chair or lead director is crucial. It is critical that the chair be thoughtful about the optimal time and place to have difficult conversations, so as not to alienate recipients or observers—or create factions. Most often, difficult messages will land best in private conversations, out of earshot of other directors. Additionally, it is vital for the board chair to fully understand each board member, their motivations, and their styles, and use those insights to tailor communications accordingly.

The chair should communicate messages in a direct and respectful way without making any exceptions or compromises, explain the rationale and evidence behind a decision, avoid any personal attacks or emotional reactions, and be prepared to deal with any resistance or backlash while remaining firm and consistent.

Draw Out Diverse and Dissenting Views

Differences in opinion should be encouraged and can be quite advantageous, provided they are shared positively and constructively. A great board chair honors good board composition and forms of team of rivals.

Board chairs should also identify members who can deflate conflict in the meeting and help pull the board out of circular discussion when a decision needs to be made, preparing them in advance for the responsibility. Russell Reynolds Associates’ Board Culture and Directors Behavior Study found that “gold medal board members” are more likely to communicate and engage with others in a constructive manner, go out of their way to understand differences and perspectives, and ask the right questions to keep the discussion focused on what matters most.

Board members should not be afraid to openly argue or debate in the boardroom, especially on big strategic decisions, such as whether to sell or keep a business. Nonetheless, board members should avoid backchanneling or undermining the board's decision once it has been made. Instead, they should actively and visibly support any decisions once finalized.

Tackle the Underlying Issue

Role clarity and purpose are essential factors in inoculating against difficult director behavior. A good chair is comfortable reminding the group why they are there and what their broader and unique responsibilities are so that they can easily point to those principles if or when board members spiral in the wrong direction. Some of the most complex and challenging topics directors face relate to divergent shareholder goals, family dynamics, or personnel issues. These topics require a deeper understanding of the motivations and incentives of the parties involved and a careful assessment of the risks and opportunities.

It is imperative that board chairs address the root cause of conflict and find solutions that align with the best interests of the company and its stakeholders. Such root causes may be related to personal motivations, individual personalities, issues around trust, power struggles, or other psychological factors. There are times when it is necessary to bring in external experts or advisors to navigate these complicated issues, which can ultimately lead to timelier resolution.

Managing difficult conversations in the boardroom can be a daunting task, but board chairs can use these tips to navigate them successfully and foster a culture of trust and collaboration among board members and stakeholders.

Russell Reynolds Associates is a NACD strategic content partner, providing directors with critical and timely information, and perspectives. Russell Reynolds Associates is a financial supporter of the NACD.

Authors

Richard Davis, PhD, is a seasoned industrial and organizational psychologist with extensive experience advising CEOs, private equity investors, and board directors.
Theodore L. Dysart is a managing director with Russell Reynolds, focused on placing board members and CEOs. 
David Lange leads Russell Reynolds Associates' global development capability.