Necessary but Absent: Dynamic Governance – Why governance keeps falling short and what needs to change

We’re in a trust crisis. People are losing faith in their leaders. Sustainable investment feels shaky, politics turbulent and tech is moving so fast it’s hard to keep up. The world feels uncertain – and at the heart of it is a lack of real, effective governance.

Trouble at the top

A global study by Henley looked at over 20,000 organisations – including four governments in 14 countries. What the study found wasn’t just concerning – it was alarming.

More than a third of senior leaders, from CEOs to public servants, admitted that conflict, confusion and toxic behaviours are common in the boardroom. Good strategy often gets lost in the mess. Plans go off-track. Progress stalls.

Even worse, 67% said they feel they can’t raise sensitive issues. They know silence hurts their organisation – but still, they hold back.

In Australia, over half of public servants admitted they couldn’t align on key policy decisions. And yet, when things go wrong, the usual fix is to restructure or hire new leadership. But the same problems return.

Active oversight and dynamic boards

The real issue? Oversight – the core purpose of governance – is being ignored.

Boards are focusing too much on compliance and not enough on actual leadership and sensitive stewardship. They’re checking boxes instead of asking the big questions: Are we creating value? Are we serving the people we’re meant to serve?

This isn’t a new concept. Even 3,500 years ago, early governance systems existed to protect value. Today, boards still need to agree on what their role is – and how they can truly oversee what matters.

But in a study of UK FTSE boards, 85% of directors couldn’t agree on their organisation’s competitive edge. In government and the public sector, the situation was just as murky – with the value they were providing to the public often unclear.

The best boards get it. They pursue dynamic governance – balancing protocols and procedures with flexibility and responsiveness. They’re not afraid of difficult conversations. They embrace them.

Governance in theory, gridlock in practice

Henley’s deep dive into the UK government – the most extensive governance study since 1852 – revealed a complicated picture. Ministers and civil servants said they respected one another. However, when it came to making policy work they clashed.

Each government department has an advisory board that is free from rigid compliance requirements. Despite having the freedom to address policy development, many ministers see public servants as obstacles, not allies.

Compared to other governments, the study revealed that British civil servants have the strongest commitment to representative democracy. They believe their job is to carry out the elected minister’s agenda. Despite such deeply held values, ministers’ complaints have not abated.

The stewardship shortage

Whether in business, government or the nonprofit world, one thing is clear: stewardship – the thoughtful, value-driven oversight that keeps an organisation on course – is in short supply. Balancing compliance with the need to find solutions to extensive differences is the challenge.

That’s why Henley created the MA Board Practice and Directorship programme. The goal? To train directors who speak the truth, even when it’s hard. Who understand the weight of their role. Who make governance robust and dynamic.

Because without strong, balanced governance, everything else falls apart.

Dynamic governance: What the numbers reveal

Global studies of over 20,000 organisations (across 14 countries) carried out by Henley over the last two decades reveal:

• 34% of Chairs, CEOs, directors and top public servants report:
  misalignment, conflict and damaging behaviours

• 67% say they feel unable to raise sensitive issues (even when it harms the organisation)

• 54% of public servants in the Australian government could not align on key policy decisions

Looking at data from the UK FTSE study of boards and management (from five different studies over the past ten years):

• 85% of FTSE directors could not agree on their organisation’s competitive advantage (with similar results for government and public sector bodies – with their value in providing services to the public unclear)

† The late Professor Andrew Kakabadse was Professor of Governance and Leadership and Programme Director of the Board Directors' Programme at Henley Business School. His research covered board performance, governance, leadership and policy. He passed away in the summer of 2025.