Boardroom conflict: How healthy tension improves decisions

In a complex environment, the question is no longer whether a board will face conflict, but whether it is built to prevail. What does it mean to build a board that can argue well and turn disagreement into strategic capability?

Boardroom conflict is an occupational reality.

As directors navigate a landscape reshaped by geopolitical instability, breakneck technological change, mounting climate pressures and economic volatility, every decision carries higher stakes and sharper scrutiny. In this environment, friction is not a failure of governance, but its ultimate stress test. And in a volatile, uncertain operating situation, the real danger lies not in boardroom tension, but in its absence.

Smooth board meetings should now be viewed as serious warning signs.

Healthy boards can thrive on productive friction. Robust disagreement can expose blind spots, sharpen decisions and prevent the kind of groupthink that allows problems to go unchallenged. Is an organisation taking on too much risk, or too little? Are assumptions around major investments being thoroughly tested? Is now the time to change the CEO, or back them through a rough patch? Is executive pay actually tied to performance or just to precedent?

These kinds of questions require rigorous debate, but challenges arise when that friction stops being productive. Disagreement can harden into factions, become personal or turn into battles over power and personalities.

"Constructive tension is actually a marker of good governance, it's not a symptom of dysfunction," says Kerryn Newton FAICD, CEO of Directors Australia.

"Id be alarmed, in some respects, if there was no conflict at all, if we defined conflict as 'diverse perspectives' in decision making, as opposed to punch-ups or conflicts of interest. You have to have tested those decisions a little. That's where constructive, courageous challenge comes into play."

The conflict challenge

But such constructive conflict is on the decline, according to Tim Duggan, author of Clear in Tension: How to get better at conflict and chair of the Digital Publishers Alliance.

"We're outsourcing some of our thinking and decision making to computers and spending less time together in person," he says. "This is leading to a conflict crisis, because many of us don't know how to communicate effectively with other people."

Results of the recent Global Leadership Forecast from global leadership consultancy DDI shows only 30% of leaders feel confident managing conflict in the workplace.

Duggan says most people prefer to avoid it and, in the absence of a framework for constructive disagreement, "it's hard and messy with so many unknowns".

However, dissent is a boardroom reality – 55% of respondents to PwC's 2025 Annual Corporate Directors Survey said at least one of their fellow board members should be replaced; and 20% cited an interaction style that hurts board dynamics. Almost 90% of directors said they could take at least one action to improve their board's effectiveness, such as speaking up more during discussions.

"You need a board that is ultimately operating collaboratively and working together, while being accepting of other people's input and positions," says David Kirk MAICD, co-founder of listed venture capital fund Bailador and chair of organisations including Rosterfy, Forsyth Barr Investment Services and New Zealand Rugby.

But robust debate is absolutely necessary.

"A board can't do its job if people don't feel comfortable speaking up about what they believe is right," he says. "At the same time, directors need to be prepared to be convinced that they might not be right. In some situations, they may still hold their view while accepting the majority of the board doesn't agree with them."

Navigating the conflict spectrum

Boardroom conflict spans a spectrum from constructive to corrosive. Principled disagreement can become destructive conflict when boards lack sufficient alignment, communication and stakeholder management. Interpersonal or political friction between directors can lead to personality clashes and factions, while power struggles between boards and CEOs, founders or shareholders are not uncommon.

In February last year, for example, four directors of ASX-listed WiseTech Global resigned, citing "intractable differences in the board" over founder Richard White's continuing role. WiseTech's share price plunged as the board rupture became public.

A more dramatic example of board-shareholder dissent occurred last year at Canadian athletic apparel company Lululemon. Chip Wilson, the company's founder and largest individual shareholder, sparked a high-profile boardroom battle by taking out a full-page ad in The Wall Street Journal accusing the board of "systematically dismantling the business model".

His subsequent proxy contest was resolved months later, with the board granting him two director picks in exchange for his agreement to observe an 18-month truce.

"When you have a group situation, such as a boardroom, some people are conflict seekers who run toward it - sometimes unnecessarily and sometimes unhealthily - but the majority will run away from discord," says Duggan.

"So, it's no wonder a lot of friction is uncomfortable, because most of us haven't had enough practice at what healthy dispute looks like. It's a skill and a muscle, and the only way to get better at it is by running towards it."

Building healthy disagreement

Genevieve Hawkins, founder of mental health advisory Mentally at Work and author of Shrinking Elephants: Untangling workplace conflict to unlock value for all, notes avoiding conflict also creates governance risks. "Take chair and CEO tension," says Hawkins, also advisory board chair of The Next Group. "People might be thinking.

The CEO is not actually telling us the full story, but they don't know what to do about it, so they sit uncomfortably and don't ask the questions they know they need to ask. That's quiet disagreement. At the other end, I've seen examples where the board is simply dismissive of the executive."

Healthy board conflict is productive, not personal. It creates friction that tests assumptions, invites robust challenge and protects dissent while bringing diverse perspectives into the room. This dynamic back-and-forth is the signature of a high-performing board, and the chair plays a vital role in facilitating that tension without shutting it down.

"It starts with being very clear about what the chair's expectations are for the way directors engage with problems," says Kirk. "Directors can put forward their views and their understanding, but the chair needs to step in if people become too assertive or aggressive. The chair might say, 'Whoa, hang on a minute. We need to back up a bit here. We don't need to get too definitive too early in this conversation'. It needs to be done in an engaging, non-judgemental way."

Hawkins adds that "exceptional chairs" elicit different perspectives on a topic. "They know their directors well and might deliberately ask particular people for their views. It's not necessarily about finding the technical expert. It's about asking, what's a different angle? What's a different perspective? What might we be missing? How could we be wrong?"

Valuing the human dimension

At the constructive end of the conflict spectrum, disagreement is used as a tool rather than a threat. This requires investment in both structural and human capacities.

However, results of the Directors Australia State of the Boardroom 2026 report show that while boards have largely got the functional systems and structures of governance in place, the more challenging element is dealing with people.

According to Newton, governance frameworks remain essential, but people literacy is emerging as the critical complement. When it comes to constructive conflict, this includes the ability to read a room, hold tension, protect dissent and turn disagreement into rigorous deliberation rather than dysfunction. "We think the boards that will be high-performing out to around 2030 are those that focus on getting this dimension of governance right."

Hawkins adds that this type of governance includes strong self-awareness.

"One of the challenges is that there are many people at board level who will acknowledge they don't like conflict and have never learned how to effectively sit with discomfort.

"It's a subset of emotional intelligence, but more specifically, it's about learning to hold your truth lightly so you remain curious about other options and perspectives.

"Regardless of our age or experience, we should acknowledge we need to keep learning about ourselves throughout our lives. What we're uncomfortable with can tell us a lot about ourselves. When we think, 'This person is completely wrong', we should stop and ask, 'What's this saying about me?'"

Conflict as opportunity

The AICD's Governing culture in a complex world report highlights the importance of boardroom composition. It says cognitive diversity strengthens boardroom culture and decision making by promoting constructive challenge and reducing groupthink and other biases. If directors bring different professional and personal backgrounds, experiences, perspectives and ways of thinking to the table, discussions are broader and richer, and decision making more robust.

"Board composition is not about ticking off whether we have someone with risk management, finance sector, HR or legal experience," says Hawkins.

"We should also ask who our customers are. What types of people should we ensure are represented on our board? That could include cultural background, age, gender and a range of other experiences that mean each person we put on the board comes at the issues differently.

"Each of us sees the world through multiple lenses because of our life experiences. We believe we can see the truth, but what we see is our truth, not necessarily what others regard as their truth."

Hawkins regards boardroom conflict as an opportunity to unlock value. She describes it as like looking at an elephant from different angles.

"None of these angles is right or wrong, and it's not about us as individuals or me versus you. It's this thing that sits between us that we're looking at from different angles, so how do we keep debating that?" 

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