Boardroom breakdowns set the tone in the organization. This disfunction permenates throughout the entity.
Boardroom Breakdowns — Collapse of competence
This is when executives take on problems beyond their capabilities or the operating environment changes in a way they have not realized. An example would be when the CEO fails to delegate as the organization grows and becomes more complex. Another example, a CEO whose company acquired another company to be its innovation "engine", fails to adapt his management style to better suit that new company.
Boardroom Breakdowns — Shortcomings in self-governance
This is essentially a failure by managers to act on their shortcomings. They may be unaware of their incompetence, or they may be in denial, driven by hubris, stress or narcissism. Alternatively, they might attempt to "deal their way out" of the problem, only making it worse. These managers act against their rational interest.
Boardroom Breakdowns —Inadequate corporate governance
This is when essential information that highlights the possibility of failure does not flow from the CEO to the board. The CEO invariably controls the board's agenda because the chair is "at the mercy" of the CEO when it comes to working out what is going on in an organization. There can also be a culture in an organization where only good news travels up. Inadequate corporate governance can also occur when a board lacks the skills to understand the information it is receiving.
