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A Different (Political) View

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A DIFFERENT (POLITICAL) VIEW

A new study shows that directors with different political views than incoming
CEOs are more likely to leave the board. Will the upcoming US presidential
election create only more strains?


Home
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 2. This Week In Leadership

FOR MORE EXPERT INSIGHTS

Andrés Tapia

Senior Client Partner, Global DE&I Strategist

Sheila O'Grady

Senior Client Partner, Consumer

Dennis Carey

Vice Chairman, Co-Leader, Board Services

The director knew her time on the board was coming to an end. But not because
she was approaching the end of her term. And not because she was nearing
mandatory retirement age. She had decided to resign after the board officially
signed off on the hire of a new CEO, one whose politics differed from her own. 

It’s a scenario that has become more common in boardrooms. A recent University
of Notre Dame study found that directors are more apt to leave the board when
they disagree with an incoming CEO’s political ideology. The study, which
analyzed directors at publicly traded companies that had appointed a new CEO
over a four-year period, also found that agreeing with an incoming CEO’s
political views didn’t necessarily increase retention.  

Released earlier this year, the study’s findings run counter to board efforts to
bring in directors with a diversity of opinions. It also further blurs the line
between business and politics. Andrés Tapia, global diversity and inclusion
strategist at Korn Ferry, expects the tension to increase as candidates start
prepping campaigns for next year’s US presidential elections. “Bringing politics
into the boardroom is a dangerous trend,” says Tapia. 

But with calls growing louder for CEOs to take a position on social issues, it’s
a trend that’s likely to continue. Climate change, reproductive rights, and
racial and gender equality are hot-button issues for business leaders as much as
they are for politicians. “Political polarization is getting harder for leaders
to manage,” Tapia says. 

Some experts worry that political disagreements between directors and CEOs could
trickle down through the organization, from executive and senior management
teams all the way down to frontline employees. Since 2019, almost half of
workers say they have experienced a political argument at work, for instance,
and one-quarter say they have been treated differently because of their
political views. 

From a board-effectiveness perspective, the problem may not be a political one
at all. Sheila O’Grady, a senior client partner in the Consumer practice at Korn
Ferry, says issues between incumbent directors and incoming CEOs suggest a
flawed succession process. “How did the CEO get hired if there wasn’t alignment
with directors?” she asks. 

Moreover, CEOs are supposed to be adept at building consensus and resolving
differences of opinion, notes Dennis Carey, co-leader of the Board Services
practice at Korn Ferry. “The boardroom isn’t the place for political warfare,”
says Carey. “It’s the job of the new CEO to find another arena for that.”

 

Learn more about Korn Ferry’s Board & CEO Services capabilities. 

Read more This Week in Leadership articles

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