Missed Market Opportunities
Quick decision-making is crucial in fast-moving markets. A lack of trust could cause delays in approving a strategic acquisition, allowing competitors to seize the opportunity instead.
Ineffective Communication
Strong communication is key to high performing and effective Boards. Poor communication between the CEO and the Board lengthens decision-making, increases suspicion and negatively affect LT value creation.
Compliance Risks
In an atmosphere of distrust, important information may be withheld or manipulated. A CEO might downplay potential regulatory issues, leaving the Board unprepared for compliance challenges.
Reputational Damage
Trust issues can leak to the public, affecting stakeholders confidence. For instance, a company's stock price might plummet following news of a Board's vote of no confidence in the CEO.