From friction to dysfunction: How top boards navigate boardroom tension

Boards need "creative abrasion" where constructive debate tests and stretches management decisions. The goal is to avoid both excessive harmony, which can lead to rubber stamping, and outright hostility that impedes board functionality.

Channelling diverse, dissenting opinions into a cohesive strategy remains the primary challenge in balancing board productivity and oversight. The following boardroom conflicts are informative and demonstrate how high-performing directors successfully navigate the tension between constructive friction and destructive dysfunction.

Judith MacCormick FAICD, managing director and CEO of board advisory BoardFocus, likens boardroom conflict to Goldilocks - when there's just the right amount of friction during discussions, and where directors are constructively debating before arriving at a consensus.

But this isn't always achieved.

Sometimes, there's outright hostility on a board, to the point where its proper functioning is impeded. On other boards, there can be so much harmony that nothing is ever properly tested, challenged or debated.

"The problem with too much harmony is that the board's not doing anything," says MacCormick. "It's just rubber stamping. It's not actually performing its role, which is to add strategic value, test and stretch management decisions."

Don't be a pushover

The perils of a board that avoids challenging and simply signs off on decisions became apparent at Qantas, where the board had seemingly deferred to CEO Alan Joyce for many years. This wasn't a sudden lapse triggered by a single crisis, but the endpoint of a 15-year arc, later described in Tom Saar's 2024 governance review as "top-down leadership with a dominant and trusted CEO" producing "insufficient listening and low speak up" throughout the organisation and, critically, a board whose engagement with management "did not always facilitate robust challenge".

The Saar review's findings resonated well beyond the boardroom. TWU National Secretary Michael Kaine described the findings as verifying "what workers, passengers and the Australian community have been saying for years: Qantas was a corporate dictatorship with a... board incapable of speaking up to Alan Joyce as CEO".

Joyce brought forward his retirement in 2023, and chair Richard Goyder AO FAICD, facing mounting pressure, resigned at the 2024 AGM.

While the board should ultimately seek a decision that all directors can support, that doesn't automatically mean meeting halfway. MacCormick gives a hypothetical example of a board considering an overseas expansion that would cost $50m.

A $25m compromise might be a total waste of money. However, if the board questioned whether there was a market for them overseas, and if the company had the capability, "then maybe it can be a staged process and you've not wasted $25m. You invest $5m to investigate then go from there".

Another board where it appears there was insufficient debate was at Crown Resorts, where a subsequent government inquiry found former shareholder and ex-board member James Packer had exercised a "disastrous" influence on board decisions.

The Bergin inquiry in NSW found that Packer had requested frequent trading updates, despite holding no board or management position, including while attempting to take the company private without disclosing the arrangement to other shareholders.

The inquiry probed the influence of organised crime links at Crown and whether the board was aware of the many red flags. A subsequent Victorian royal commission into the company revealed corporate failings, "including in reporting, escalation, skill, knowledge, culture, appropriate diligence and care and lack of questioning".

The commission also heard that the board's risk committee needed to "ensure in-depth discussion at regular intervals of specific risk categories such as [anti-money laundering], [counter-terrorism financing] and the external regulatory environment".

Bridging the gap

John Mullen AM FAICD, chair of Qantas, Treasury Wine Estates and Brambles, says boards need dissenting opinions and vigorous debate, and to subsequently achieve a united position when a decision is made.

"I try really hard to make sure that at the end of the debate, you show unanimity, and even those who didn't agree say, 'OK, you know, between us, I don't agree, but the majority thinks that, so I will support it. Then they support it with their actions," he says.

"There's nothing worse than someone who agrees around a board table and then goes off and starts to undermine that [decision] by talking to others."

Chairs should be mindful of cultural differences when fostering debate. While Australians are often forthright and prepared to argue, sometimes a director's background means that they prefer to sit in silence rather than dissent.

When it comes to too much conflict on a board, there can be many causes, according to Mullen. Factions can develop where groups of directors disagree on some of the fundamental issues about the company.

"It's more than just one decision," he says. "It means they start from different places on pretty well everything, and then it's really hard to bridge that gap - and the two sides don't really trust each other."

Sometimes, big egos can be the cause, where one director dominates the debate and various board members rally around that director while others hold their counsel, until the board is split. The best solution is to try to catch the problem early and move the offending director off the board by suggesting they don't renominate when it's time for board elections.

Mullen says most directors agree, because they don't want to be embarrassed at the AGM if it comes to that. He suggests board conflict might be more common than made apparent by company announcements that a director is leaving to pursue other interests, because most [of the issues] don't become public.

Stopping the problem before it begins is the ideal. Mullen's practice has been to choose directors for board positions based more on their character, personality and style, than their background, because most board candidates have impressive CVs.

Crossing the line

A common source of board conflict is when a director oversteps their responsibilities and crosses the line from governance into operations. A case in point was when the ABC board, under chair Justin Milne, sacked managing director Michelle Guthrie in September 2018. It emerged that Milne had reportedly told Guthrie to "get rid of" a journalist after the Turnbull government complained about her.

The board met without him and requested he step aside. Staff also threatened to walk off the job. Three days after Guthrie was sacked, Milne resigned. Directors need to be aware of the legal and governance rules that apply when a board acts against its chair, which vary depending on whether they're stripping them of the chair title or removing them as a director entirely.

Another cause of board disagreement is when a founder or major shareholder is too dominant or potentially breaches governance rules. This occurred at Mineral Resources in 2024-25, when the board investigated founder/MD Chris Ellison, finding he had breached governance standards and had not been as forthcoming with directors as he should've been. The board fined him and initially accelerated leadership succession, targeting his departure by mid-2026.

But there was also board fallout. Chair James McClements and director Zimi Meka left. The new board then scrapped the decision to replace the leader, citing an inability to guarantee a smooth transition without risking the business, reigniting concerns of Ellison's continued dominance.

Public relations adviser John Connolly FAICD says conflict can arise when directors lose sight of their core role.

"The most basic principle is the board's responsibility to the company as a whole, not to the shareholders first. If you focus on your responsibilities... then you move the conflict from identity to substance."

That's not to say directors shouldn't ever listen to shareholders, and Connolly notes it can become a source of conflict when some directors are tone deaf to shareholder concerns. "There are usually one or two directors who get it and say, 'We should be listening to what they're saying and talking to them. Maybe we need to change and do what they're suggesting."

Like Mullen and MacCormick, Connolly believes the chair has a major role to play in forestalling conflict. 

"When conflict festers, you need to have a look first at the chair," he says. "The chair is the one who's got control of the agenda and who should be drawing out directors."

This article first appeared as 'Fight club' in the Oct/Nov 2026 issue of Company Director Magazine.