The Warning Signs That CEOs Are Going Off-Track

Across hundreds of conversations on Enter the Boardroom, Chairs and directors repeatedly reflected on moments when, in hindsight, the signs were already there.

Rarely did CEO failure come out of nowhere. More often, boards described subtle shifts in behaviour, information flow or decision-making that were visible months - sometimes years - before performance deteriorated or trust broke down.

What follows are the warning signs our guests most consistently pointed to as indicators that something may be going wrong, and where earlier intervention could have made the difference between course correction and crisis.

What this article reveals at a glance

1. Most CEO failures are preceded by behavioural signals, not performance metrics.
Warning signs tend to show up first in how information is shared, how challenge is handled, and how power is exercised, long before results decline.

2. Loss of trust is the most dangerous early indicator.
When bad news is delayed, transparency narrows, or defensiveness increases, boards rapidly lose the ability to shape outcomes.

3. Control, defensiveness and isolation often travel together.
CEOs under pressure may centralise authority, limit access to the organisation, or resist scrutiny, precisely when boards need more visibility. 

4. Drift in strategy, customer-focus or core business is rarely accidental.
Loss of focus on customers, the core business or external reality is a signal that leadership attention may be misaligned.

Taken together, these signs suggest that effective boards intervene early, through support, challenge and recalibration, rather than waiting until replacement becomes the only option.

Warning signs boards should look out for 

Aversion to transparency

“When something is described as ‘off limits’, that’s a huge signal. If a board can’t properly understand something fundamental, how can customers be expected to?” Baroness Helena Morrissey, Former/Chair of Altum Group, Fidelis Insurance Group, Investment Industry Diversity Project, AJ Bell and The Investment Association

“If people are holding back relevant content for fear of offending, that’s a real risk. You might still see agreement in meetings, but you won’t be hearing what people actually know. When people fear looking naïve or being wrong, the quality of decisions drops very quickly.” Amy Edmondson, Professor of Leadership & Management at Harvard Business School, ranked #1 management thinker in the world by Thinkers50 in 2023

Too much control of the company

“This sometimes happens when the organisation has a dominant chief executive with a strong character. Or because of the way power within the organisation is structured. For example, if the chief executive is also a dominant shareholder or controls appointments to the board. When this happens, it becomes hard, if not impossible, for the executive to be subject to proper scrutiny.” Gerry Brown, Chair of NovaQuest Capital Management and G Brown Associates,  co-author of Disaster in the Boardroom

Loss of objectivity

“The further into a company you are, the harder that gets because you become socialised to the norms… A good board has diversity of opinion that really does drive that objective questioning.” Neil Thompson, Chair of Temple Holdings Ltd, NED at E P Barrus Ltd and Mentor at vroom

Exclusive focus on one area of the business at the expense of others

“If all they can talk about is one of the corners, say ‘people’, but never about any of the other three (members, money and growth) you know you’ve got a problem.” Joanne Hindle, Chair of Stafford Railway Building Society and Shepherd’s Friendly Society, NED at Bank of London and Middle East 

Deflection instead of ownership

“Every meeting there’s a different problem… it was the weather, it was the train strike, it was absence… where there’s lots of deflection, distraction, measuring of the problem as opposed to really getting to the root cause, that’s a pattern that would make me nervous.” Lynne Weedall, SID at Dr. Martens - Airwair International Ltd, NED and Committee Chair at Softcat plc, Greggs and Stagecoach Bus 

Disconnection from the organisation

“Where you’ve got perhaps the senior leadership or the CEO in a kind of glass bubble, separated from the organisation… that might start to ring some alarm bells.” David Sole OBE, Managing Partner of School For CEOs, Owner of David Sole & Associates 

Defensiveness about board engagement with the organisation

“If an executive team gets defensive about non-execs engaging with people, that tells you quite a lot anyway.” Gillian Wilmot, Chair of ZOO Digital Group plc, Jisp and SYNALOGiK Innovative Solutions Ltd

Lack of clarity over who is in charge (especially between the Chair and CEO)

“When the power structure becomes unclear, people don’t know who the boss is - that’s when things start to go wrong.” Roger Parry CBE, Former Chair of Oxford Metrics, Director at the Donmar Warehouse, Partner at Stoneglade Capital 

Inability to adapt strategy to customer needs

“You can have an initial idea, but you have to be prepared to flex to get to the right place with the customer.”  Dame Jayne-Anne Gadhia, Lead Non-Executive Director at HMRC, Senior Independent Director at Tate, Chair of Moneyfarm and an Advisor to The Vanquis Banking Group, UniCredit and the Fintech Growth Fund

“I’ve been in organisations where frankly I didn’t really understand the product. When I moved into banking, I spent a lot of time with customers, and what they were telling me didn’t match what the board thought. If you’re not listening to customers, you’re flying blind.” Sara Weller CBE, Chair of the Money and Pension Service and former/NED at BT, Virgin Money and Lloyds Banking Group and UK Department for Work and Pensions 

Exhaustion and blinkered thinking

“I’ve been in situations where I feel the founder is getting too blinkered, a bit jaded, a bit exhausted. It’s an exhausting process to start a business and keep the momentum going, and sometimes that’s a perfectly reasonable thing to raise at a board.” Nick Jenkins, Founder and former CEO of Moonpig, former Dragon on Dragon’s Den, Chair of Virtualstock, NED at Green Energy Options and Trustee at Operation Fistula

Failure to recognise the role of macro trends in success

“The underlying cause of our outperformance wasn’t great strategy or execution, it was a macro tailwind. The danger is believing the performance is down to management when it’s actually driven by external factors that will eventually unwind.” Gerry Murphy, Chair of Tesco and Burberry, Trustee at Burberry Foundation, Senior Advisor at Perella Weinberg and Mentor at J&A Mentoring

Bad news taking too long to surface

“When bad news takes too long to surface, that’s usually not a systems issue, it’s a trust issue. If management is polishing decks rather than bringing problems early, the board has already lost visibility. By the time the issue reaches you, you’ve often lost the ability to shape the outcome.” Dorothy Burwell, Partner at FGS Global, NED at Post Holdings, and Pennon plc

Complacency over cyber threats

“When a board or a chief executive tells me that they are in a good position in terms of their cyber planning, I immediately worry. That is my immediate flag … The business that says, yeah, we're really worried about cyber, and we're constantly trying to think about what's the bleeding edge risk in cyber, and are we creating an environment where our teams can be honest about their concerns, that's an organisation that's in a better place.” Baroness Dido Harding, former Chair of NHS Improvement, Executive Chair of NHS Test & Trace, NED at the Bank of England, and CEO of TalkTalk Telecom Group plc

Acting as though the rules don’t apply to them

“The single dilemma I read about over and over again is leaders acting as if the rules don't apply to them… if what we have is a CEO acting as if those rules only apply to the workforce and not the C-suite, we’ve got a credibility and a culture problem.” Professor Alison Taylor, Clinical Associate Professor at NYU Stern School of Business and author of Higher Ground: How Business Can Do the Right Thing in a Turbulent World 

Loss of focus on the core business

“A major warning flag for me is when management teams drift away from the core business and spend all their energy on diversification and shiny new projects. Boards have to be ruthless about asking whether the core is really getting the attention it deserves.” Sir Ian Cheshire, Chair of Land Securities Group and Spire Healthcare Group. Former Group Chief Executive of Kingfisher plc and Chair of Channel 4, Barclays Bank UK and Debenhams