Warfare at the Top: CEO vs Chairperson Battle Royale

Warfare at the Top: CEO vs Chairperson Battle Royale

We just experienced possibly the largest wave of CEO departures in recent history. Was it due to falling profits? Poor succession planning? Or is there more drama behind the scenes? Think firings, hurt egos, politics, and personal infighting. Author Isabelle Nüssli uncovers one of the big reasons for turmoil at the top ― the fractious relationships between egos at the executive level, particularly between CEO and chairperson. Hence the brilliant title of her new book, Cockfighting: Solving the Mystery of Unconscious Sabotage at the Top of the Corporate Pyramid.

“When you read the news, usually the reason [given for the CEO leaving] was strategy misalignment or different leadership style or different chemistry, etc. But the story that is not put out to the public is that there was a relational conflict, which apparently is the case most of the time,” says Nüssli.

Nüssli believes that at the core of most CEO turnover is personal conflict between the CEO and the board chairperson, and she’s done the research to back it up. After earning her MBA at Northwestern University, she was thrust into the chairperson role for her husband’s family business, an international leading provider of event infrastructure. Tasked with hiring a new CEO, she thought she found a match made in heaven with a CEO who initially seemed to offer a mix of personal charm and go-getter spirit. What started as a positive, quickly turned into a crash course in the reality of the relationship between the CEO and chairperson.

“He had a habit of saying, ‘I’m the boss’,” Nüssli recalls. As that CEO sought to acquire more power, he became deeply entrenched in organizational politics and less focused on the issues that he was brought in to address. The relationship fizzled and escalated to a PR nightmare after the CEO was terminated, with newspapers spewing gossip about the CEO and the Nüssli family. It was a physically and emotionally draining experience and she was left with many questions: “What makes a person act a certain way? Why do people go out of their way to achieve or hold on to power? What could I have done better or differently?”

“I spoke to people in senior positions and then I learned that I was far from alone, that most of them had already experienced something similar. A similar turmoil, but had never spoken about it,” Nüssli says.

As Nüssli went on to earn additional master’s degrees in business law as well as coaching and consulting, things started to fall into place. “These three pillars: business, law, and applied psychology [as] applied to business somehow need to be combined in order to make a move in understanding why so many conflicts happen especially at the top of the corporate pyramid, where power and exposure are involved because of leadership,” Nüssli explains.

How can we figure out this conflict and bring about functional peace? During her studies, Nüssli set out to interview a diverse group of 70 pairs of chairpersons and CEOs to dive deep into their relationship dynamics and to decipher conflict.

Three Conscious Drivers of Conflict
Early on in the research, three relevant conscious drivers of conflict made themselves immediately apparent:

  1. Trust — This one is a no-brainer. If two people don’t trust each other, then a strong working or personal relationship is impossible.
  2. Presence of a role model or an anti-role model — Did the chairperson and CEO in the conflict have a positive role model of an executive or boss that they wanted to be like? Or an anti-role model that showed them who they don’t want to be?
  3. Clarity — This pertains mostly to role clarity; how the role is to be executed, not just its responsibilities and its relationship to others.

Five Unconscious Factors of Conflict
Continued research found that these conscious drivers of these relationships are heavily influenced by five unconscious factors:

  1. Family origin — The roles that people play in their families and the roles that they develop in childhood inform how their adult relationships operate and these patterns become evident in business and private lives.
  2. Limited time that leaders are together — A chairperson is rarely around full-time and a chairperson and CEO won’t spend extra time together if they don’t like each other, which only serves to widen the divide.
  3. List corporate governance — Nüssli explains, “Corporate governance defines the role. So, it’s about the what. What is the role? But what’s actually lacking is the how. How are these roles assumed? How are they executed?” And that crucial part is list corporate governance. If the expectations and understanding of the two parties are not aligned, then that can lead to conflict.
  4. Transference — Transference is the projection of hopes or fears and anxieties onto the other person, in this case it’s usually onto the leader. Sometimes transference can work like an unconscious role model or anti-role model. Think of when you instantly don’t like a new authority figure because they remind you of a mean one from childhood, for example.
  5. Value and understanding of power — Nüssli noticed that many of the leaders who she interviewed had what she called an “ambiguous relationship with power.” Although they would say that power is not important for its own sake, only to achieve the company’s goals, later they would also say that they enjoy receiving recognition and don’t like to share the spotlight.

Two Intensifiers of Conflict Drivers
Sometimes research yields surprising findings and patterns, as well. Nüssli also identifies two so-called intensifiers of the drivers of conflict that she discovered:

  1. Functional firstborn — According to Nüssli, a functional firstborn is someone who operated as the firstborn in their family, regardless of whether or not they are actually the chronological firstborn. It can be a biological firstborn, someone who is the oldest after a large age gap with the next oldest sibling, and so on. She also identified what she calls a super firstborn.

There are many pre-existing beliefs, some backed by scientific research, that firstborns possess certain traits like perfectionism, being analytical, responding well to structure and rules, often having the highest IQ in the family, and being goal- and achievement-oriented. Nüssli says that this is largely due to “their upbringing because it’s all about parental attention. Functional firstborns tend to receive more parental attention than later-borns or non-functional firstborn children.”

Nüssli points out that although these characteristics seem to be helpful in the rise to the top of corporate leadership, they don’t seem to be the ones that help maintain healthy relationships with colleagues, especially at the top of the corporate power structure.

  1. Self awareness — A person’s level of self-awareness can be gleaned from their lifestyle, habits, and interactions with others. Nüssli noticed that the executives that she interviewed enjoyed talking about their professional accomplishments, but they became much more shy when asked to talk about their childhoods and families. She understood that these people were aware of their issues and perceived weaknesses and the effect it has on their relationships, be it personal or professional.

However, one-sided self-awareness is not satisfactory. Nüssli says, “If one person was self-aware or perceived him or herself as self-aware but not the counterpart, then it didn’t really help much the relationship.”

Forming Healthy Relationships Between a Chairperson and a CEO
While many factors can play into whether the relationship between chairperson and CEO is blissful or pure disaster, Nüssli found that the relationship got a boost when both individuals felt self-aware. To leverage this finding, Nüssli developed what she calls a collaboration contract to ensure that a chairperson and CEO get started on the right foot. Nüssli says that a collaboration contract is not a traditional paper contract that two parties sign, but rather a structured dialogue. She explains, “Each person that joins a company enters a so-called psychological contract with the company. So, I recommend that the chairperson and CEO enter a so-called CCCC (Chairperson CEO Collaboration Contract) which is a type of psychological contract.”

The purpose is to align those different expectations. With the help of a mediator, the chairperson and CEO can achieve role clarity with list corporate governance, discuss power dynamics with employees and groups, and establish a sense of trust. She says, “The main goal is really to talk through these different elements and to align their views, their perceptions, [and] their expectations in order to improve their relationship.”

When there is conflict between a chairperson and CEO, it is felt throughout the organization and can damage company performance and profits. Nüssli stresses that strong, productive professional relationships at the top of the corporate power structure come only from communication and a deeper understanding of the other person. It’s about “Getting the balcony perspective, not just acting from the stage,” she says.