Senior Client Partner, Global DE&I and ESG Strategist
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A Different (Political) View
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.”
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