Navigating the Chair - CEO Relationship

In November 2023, the board of OpenAI did the most dramatic thing a board can do: it fired the CEO. Not just any CEO. Sam Altman — the public face of generative AI, the leader most closely associated with OpenAI’s extraordinary rise, and one of the most recognisable figures in global technology.

The board’s statement was terse, but explosive. It said Altman had not been “consistently candid” in his communications with the board, and that the board no longer had confidence in his ability to lead. Within hours, OpenAI President Greg Brockman resigned. Within days, employees were reportedly threatening to leave. Microsoft, OpenAI’s most important commercial partner, was thrust into the centre of the crisis. And by the end of the week, Altman was back.

The episode was not merely a Silicon Valley drama. It was a governance drama that occurs every day in companies large and small. What happens when the relationship between executive leadership and board oversight breaks down?

A later review concluded that Altman’s removal stemmed from a significant breakdown in trust between him and the prior board, while also stating that the board had acted in good faith. Boards fail when trust collapses and the basic architecture between the CEO and the board becomes unstable.

The Chair-CEO relationship is often described as a partnership. But it is also a constitutional relationship: a careful balance of authority, independence, challenge and support. When it works, the CEO is empowered to lead and the board is equipped to govern. When it fails, the consequences can move from private tension to public crisis with astonishing speed.

The Core Tension: Leadership Versus Oversight

The Chair-CEO relationship is one of the most consequential — and least discussed — dynamics in corporate governance.

When it works well, it creates a powerful equilibrium. The CEO has the confidence, space and authority to lead. The Chair ensures the board provides effective oversight, challenge and support. The boardroom becomes a place where strategic judgement improves, risks are surfaced early, and leadership is strengthened rather than second-guessed.

When it breaks down, the consequences can be severe. Trust erodes. Information becomes filtered. Board discussions become performative rather than candid. The CEO may feel undermined. The board may feel excluded. And, in the worst cases, the organisation finds itself in a full-blown governance crisis.

At the heart of the relationship is a productive tension. The CEO leads the company. The Chair leads the board. That distinction sounds simple. In practice, it is often where the trouble begins.

The CEO is accountable for performance, execution, culture, customers, people, investors, regulators and day-to-day decision-making. The Chair is accountable for the effectiveness of the board, the quality of governance, the agenda, the board’s relationship with management, and ensuring the CEO is both supported and held to account.

The relationship becomes dysfunctional when either party crosses too far into the other’s territory.

A Chair who becomes too operational can drift into “shadow CEO” territory — second-guessing decisions, bypassing management, or creating confusion about who is really in charge. A CEO who resists oversight can treat the board as an inconvenience rather than a fiduciary body, limiting transparency and reducing the board’s ability to add value.

The goal is not to eliminate tension, but to make the tension healthy.

Common Failure Points in the Chair-CEO Relationship

1. Role Confusion

The most common problem is blurred accountability.

The Chair may believe they are “helping” by getting involved in operational detail. The CEO may interpret this as interference. Conversely, the CEO may treat board challenge as a lack of trust.

Clarity matters. The Chair owns the board process; the CEO owns the business. The Chair should not run the executive team. The CEO should not manage the board.

A useful test is this: is the Chair helping the CEO think better, or making decisions on the CEO’s behalf?

2. Poor Communication Rhythm

Many Chair-CEO relationships fail not because of one dramatic disagreement, but because of accumulated misunderstanding.

Infrequent, vague or overly formal communication creates gaps. The Chair may be surprised by a major development. The CEO may feel that concerns are being raised too late. The board may sense that information is being managed rather than shared.

The best Chair-CEO pairs usually have a regular private rhythm: weekly or fortnightly conversations, pre-board agenda discussions, post-board debriefs, and informal check-ins when significant issues arise.

The purpose is not to create a parallel management structure. It is to ensure there are no surprises.

3. Power Struggles

Power struggles emerge when either the Chair or the CEO seeks dominance rather than balance.

A dominant Chair can weaken the CEO’s authority with the executive team. A dominant CEO can reduce the board to a rubber stamp. Both outcomes are dangerous.

The Chair-CEO relationship should be based on mutual legitimacy. The CEO has executive authority. The Chair has governance authority. Neither should need to diminish the other in order to be effective.

This is particularly important in founder-led, high-growth or crisis-stage organisations, where personality, pace and power can overwhelm governance process.

4. Misaligned Time Horizons

Boards often think in terms of long-term resilience, risk, reputation, capital allocation, succession and governance. CEOs, particularly in high-pressure environments, may be focused on delivery, quarterly targets, customer demands, regulatory issues, funding, transformation or crisis response.

Both perspectives are valid. The problem arises when they are not integrated.

The Chair’s role is to ensure the board does not become detached from operational reality. The CEO’s role is to ensure short-term execution remains anchored in long-term value creation.

5. Lack of Independence

A healthy relationship requires closeness, but not capture.

The Chair must build trust with the CEO while preserving independence of judgement. If the Chair becomes too close to the CEO, the board may lose its ability to challenge. If the Chair becomes too distant, the CEO may lose the benefit of guidance, perspective and early warning.

The Chair is not the CEO’s line manager in a conventional executive sense. Nor are they the CEO’s advocate at all costs. The Chair is the guardian of board effectiveness and, ultimately, of the company’s long-term interests.

What Management Independence Really Means

Management independence does not mean management secrecy. Nor does it mean the CEO can ignore the board.

It means the CEO and executive team have the authority to run the business within the strategy, risk appetite, delegated authorities and governance framework approved by the board.

This matters for three reasons.

• First, it enables speed. Management must be able to respond to markets, customers, competitors and operational challenges without seeking board approval for every decision.

• Second, it creates accountability. If the CEO is responsible for performance, they must also have sufficient authority to deliver it. If the Chair forces important management decisions, then the Board cannot hold the CEO accountable for the outcomes.

• Third, it preserves the board’s role. A board that becomes too operational loses altitude. It can no longer see patterns, challenge assumptions or govern effectively.

The boundary is not always easy. Boards should be deeply engaged in strategy, risk, culture, capital allocation, major transactions, succession, regulatory issues and material crises. But engagement is not the same as execution.

What Good Looks Like

A strong Chair-CEO relationship is usually built around six disciplines.

Six disciplines of a strong Chair-CEO relationship

1. A Clear Governance Map

There should be explicit clarity on reserved matters, delegated authorities, escalation thresholds, board committee responsibilities, and the respective roles of Chair, CEO, SID, committee chairs and executive management.

Without this clarity, even well-intentioned people can find themselves in conflict. The Chair thinks they are providing oversight. The CEO experiences interference. The board asks for more detail. Management feels it is being micromanaged.

Good governance requires boundaries that are both clear and alive — clear enough to prevent confusion, but flexible enough to respond to complexity.

2. A Regular Private Cadence

The Chair and CEO should meet regularly, with enough structure to cover performance, people, strategy, risk, board dynamics and emerging issues — but enough informality to allow candour.

The best conversations often happen before matters become formal board issues.

This private cadence should not become a decision-making forum that bypasses the board. Rather, it should be the place where issues are framed, concerns are surfaced, and board discussions are made more effective.

A good Chair helps the CEO prepare for the board. A good CEO helps the Chair understand the true state of the business.

3. No Surprises

The CEO should not surprise the Chair. The Chair should not surprise the CEO. And the board should not be surprised by issues that management knew were material.

This does not mean every problem must be solved before it reaches the board. Quite the opposite. It means serious issues should be surfaced early enough for the board to help.

One of the greatest tests of board maturity is how early bad news appears.

Weak governance cultures punish the messenger. Strong governance cultures ask: what do we know, what do we not know, what are the options, and what decisions are required?

4. Constructive Challenge

The Chair must be able to challenge the CEO directly and privately. The CEO must be able to hear challenge without interpreting it as disloyalty. Equally, the Chair must know when to support the CEO publicly, particularly when the board has aligned behind a course of action.

Challenge in private. Alignment in public. Reassessment when facts change.

Constructive challenge is not aggression. It is not grandstanding. It is the discipline of asking the hard questions in a way that improves judgement rather than simply proving a point.

The best Chairs challenge assumptions, not egos. The best CEOs welcome challenge because they know it sharpens the quality of their decisions.

5. Thoughtful CEO Evaluation

CEO evaluation should not be a perfunctory annual process.

It should include performance against strategy, financial and non-financial metrics, leadership, culture, succession development, stakeholder management, risk judgement and values.

The Chair should lead the process, but the whole board should have input. Feedback should be direct, fair and useful.

Too often, CEO evaluation is either too soft or too blunt. The best process is rigorous without being punitive. It should clarify expectations, identify development areas, recognise achievements, and ensure the CEO is being assessed against the right measures — not merely the most visible ones.

6. Periodic Relationship Health Checks

The Chair-CEO dynamic should be assessed as part of board effectiveness reviews. Useful questions include:

• Is the CEO getting enough support from the Chair?

• Is the board receiving the right information at the right time?

• Are boundaries between governance and management clear?

• Is challenge candid but constructive?

• Are difficult issues being surfaced early enough?

• Is the relationship too close, too distant, or appropriately balanced?

The relationship should not be left to chemistry alone. Chemistry helps. But governance cannot depend on whether two people happen to get along. The best boards institutionalise healthy dynamics before unhealthy ones become embedded.

The Chair as Coach, Challenger and Guardian

The best Chairs operate in three modes.

• They are a coach to the CEO — offering perspective, experience and a private sounding board.

• They are a challenger — asking the difficult questions, testing assumptions and ensuring risks are not ignored.

• They are a guardian — protecting the integrity of the board, the governance framework and the long-term interests of the company.

Problems arise when the Chair becomes only one of these. A Chair who only coaches may become too close. A Chair who only challenges may undermine trust. A Chair who only guards process may fail to support leadership in moments that require courage and judgement.

The art lies in knowing which mode is required — and when. In a crisis, the CEO may need the Chair to be a calm sounding board. In a strategic pivot, the CEO may need the Chair to test assumptions. In a governance failure, the company may need the Chair to act decisively and independently.

The role requires judgement, emotional intelligence and courage.

The CEO’s Responsibility

The Chair-CEO relationship is not solely the Chair’s responsibility. The CEO also has a duty to make the relationship work.

• That means being transparent, not performative.

• It means sharing bad news early.

• It means respecting the board’s role.

• It means avoiding the temptation to manage the board through selective information.

• It means recognising that good governance is not a constraint on leadership, but a source of resilience.

  
  

A confident CEO should welcome a strong Chair. A strong Chair should want a confident CEO.

The relationship works best when both parties understand that authority and accountability must travel together. The CEO cannot be accountable for results without the authority to lead. The board cannot be accountable for governance without the information and independence required to oversee.

The Relationship That Sets the Tone

The Chair-CEO relationship sets the tone for the entire board. If it is tense, political or unclear, the board feels it. The executive team feels it. Eventually, the organisation feels it.

If it is candid, respectful and well-boundaried, it creates confidence. The CEO can lead. The board can govern. Difficult issues can be discussed before they become crises. Strategic decisions are better tested. Accountability becomes clearer.

Good governance requires a strong CEO operating within a strong governance framework. Effective oversight requires a Chair with judgement, independence, emotional intelligence and the courage to challenge without the need to control.

The Chair and CEO do not need to agree on everything. In fact, they should not.

But they do need to trust each other enough to disagree well. That is where board effectiveness begins.