Introduction

Whenever there is a group of people coming together for work, then tension will be present.

This series of articles will explore the tensions among directors on boards and delve deeper into the associated issues that may arise. Further, there will be canvassing of possible solutions and exploring of how they can be managed effectively.

So, what do we mean by ‘tension’?

When referring to a board of directors, “tension” typically describes a situation of disagreement, conflict, or differing viewpoints among board members. This tension can arise due to various factors, such as:

1. Divergent Opinions
2. Conflicting Interests
3. Leadership Disputes
4. Performance Issues
5. Communication Gaps

While tension can be challenging and even destructive to an organisation’s health, it can also be positively constructive if managed properly, as it can lead to robust discussions, better decision-making, and innovative solutions.

Effective governance among directors requires navigating and resolving such tensions to ensure the board operates cohesively and in the best interest of the organisation.

Manifestation of Tensions

So how do some of those tensions manifest themselves when directors are meeting and seeking to work together as stewards of an organisation?

Strategic Direction

Directors may have different visions for the organisation’s future. And it is not unheard of for directors to change their visions over time. In some instances, directors may push for rapid expansion into new markets, while others may advocate for consolidating existing operations.

Risk Appetite

Every directors’ tolerance for risk can vary widely. Some directors may support high-risk, high-reward projects, while others may prioritise fairly extensive risk mitigation and be committed to steady growth.

Ethical Considerations

Ethical dilemmas can arise in a myriad range of situations including aspects of director remuneration, buying and/or selling of assets. Directors may disagree on issues like environmental sustainability, employee workplace and well-being practices and corporate social responsibility.

Personal Agendas

Directors may have personal interests or affiliations that influence their decisions, leading to conflicts of interest.

Bias

A director’s natural biases can significantly contribute to the existence of tensions among directors on boards. These biases can shape their perspectives, decision-making processes, and interactions with other board members.

Power Dynamics

Power struggles can occur, especially if there are dominant personalities or factions within the board. Directors may compete for influence over key decisions and leadership roles.

Performance Evaluation

Evaluating the performance of the CEO and other executives can be contentious. Directors may have different criteria and expectations, leading to disagreements on performance assessments and compensation.

Cultural Differences

In multinational companies, directors from different cultural backgrounds may have different approaches to business practices and communication styles.

Regulatory Compliance

Directors may have differing interpretations of regulatory requirements and how strictly they should be followed.

Conclusion

Understanding and managing these tensions is crucial. It is acknowledged that the existence of board tensions is healthy. Therefore any board that seeks to be fit for purpose in 2025, needs to successfully manage its tensions. This will most likely enable it to operate as a high-performing board. It also ensures that it achieves amazing professional fulfilment for each director and importantly optimum organisation health.

In our upcoming articles, we will examine various tensions in detail, providing insights and practical solutions to help directors navigate these challenges. By addressing these issues head-on, boards can foster a far more collaborative and productive environment, ultimately leading to better decision-making, success and optimum organisation health.

Be Alert

Stay tuned for our next article, where we will dive into the complexities of strategic direction and how boards can align their visions for the future. These articles will be both informative and helpful, offering valuable guidance for anyone involved in a stewardship role of an organisation.

DISCLAIMER: This article is general only in nature and is not advice.