governance friction

Decision Delay

Adding layers of approval increases the time it takes to respond to market changes or internal needs. A person who was once the sole authority may find the new requirement for consensus frustrating and costly in terms of energy. This delay is the price paid for a more balanced and transparent management style.

Process Overhead

The work required to satisfy governance standards involves preparing reports, holding meetings and documenting every choice. These activities consume the capacity of the leadership team and can distract from the core mission of the business. Finding the right level of oversight is a constant challenge for any growing firm.

Structural Tension

Conflicts between the board and management can lead to a breakdown in communication and a loss of momentum. When the rules are too rigid, they stifle innovation, but when they are too loose, they expose the company to risk. Managing this balance is a primary duty of the chairperson.

Governance friction is a natural byproduct of the move from a startup to a regulated enterprise.