The board's agency

Daniel Taylor focuses on an essential factor for boards looking to rediscover their purpose and step into their strategic role

In governance we talk confidently about authority, accountability, assurance and stewardship. We talk far less about agency. Yet agency sits beneath all these ideas. It is the scaffolding that allows a board to act with purpose, shape a direction, and step forward when culture or performance begin to drift.

In a landscape marked by complexity, distributed leadership and intensifying regulatory pressure, boards can too easily slip into the role of observers. If a board is to stay effective, it must understand what its agency is, how it works, and how it might be eroding.

What we mean by agency

Agency in a governance context is the ability and freedom to act on behalf of the organisation. It blends formal authority, practical capability and the confidence or willingness to act where needed. A board with strong agency isn’t simply authorised; it is enabled.

We should distinguish agency from power. Power is about compulsion; agency is about purposeful action. Boards rarely command; they guide, challenge, enable and sometimes restrain. Agency provides a more accurate lens on how boards actually influence outcomes.

Classical agency theory describes the board as the agent of the owners or members, while the executive acts as the agent of the board. That multilayered relationship is real. Boards that understand their own agency are better positioned to navigate it without collapsing into micromanagement or passivity.

Where board agency comes from

Agency arises from several interlocking sources.
First, constitutional authority: statutory duties, articles or constitution, delegation schemes and reserved matters. These define what the board legally and formally may do. The architecture matters.

But the formal structure alone is insufficient. The culture around the board – organisational openness to challenge, psychological safety in the boardroom, quality of relationships with the executive – often determines whether the board can exercise its responsibilities with confidence. In practice, cultural agency often matters more than the written documents.

Then there is informational agency. Boards act through what they know. When information is partial, late, highly curated or asymmetrical, the board’s agency weakens even if the formal powers remain intact. Boards that are serious about agency build their own channels of insight, triangulate what they are told and ensure exposure to the unfiltered reality of the organisation.

Finally, there is strategic agency. A board must be able to shape the future, not simply review what has already been decided. Direction, risk appetite, allocation of resources – all sit at the heart of this strategic dimension. If a board cannot shape those questions, its strategic role is compromised, and it becomes little more than an assurance mechanism.

What strengthens and weakens agency

Agency grows when the roles of board and executive are clearly understood, when agendas look forward rather than purely backwards, and when non-executive directors use their skills and confidence to better support each other.

A chair who draws out the collective intelligence of the board, manages the dynamic with the executive constructively and creates space for deliberation is one of the most powerful contributors to strong agency. Information that is rich, unfiltered and timely supports agency deeply. And strong committee work in risk, assurance and performance reinforces the board’s ability to act early and wisely.

Agency is weakened when constitutions are ambiguous or outdated, when the executive controls information too tightly, when the board is dragged into operational minutiae, when groupthink or excessive politeness prevails, when capacity or expertise is weak, and when there is no strategic time. In those boards, agency often withers gradually – and then suddenly. They become reactive, defence-oriented, and narrow in their field of vision.

Agency in the board-executive relationship

Board agency and executive agency are deeply interdependent. Strong executive agency means the organisation can act effectively. Strong board agency means that action remains aligned with purpose, values and acceptable risk. When the balance is right the relationship is energising and productive.

Problems arise when one side crowds out the other. A board that inserts itself too deeply into operations, builds excessive layers of sign-off or chases every executive decision creates organisational drag and weakens the executive’s capacity.

Conversely, an executive that centralises decision-making, limits transparency, or presents the board with fully formed proposals rather than involving it erodes the board’s ability to shape direction.

The highest-performing organisations build a shared governance space where executives lead with confidence, boards shape and hold to account, and information flows without friction.

Agency at the heart of high performance

Strong agency enables a board to fulfil its strategic role: shaping purpose, framing risk appetite, influencing resource allocation and anticipating external challenge. None of that is possible if a board lacks the time, information, confidence or legitimacy to step in when it matters.

Governance at its best is judgement under uncertainty. Agency gives the board the conditions to exercise that judgement well. Boards with strong agency change organisational course when necessary, intervene early when culture begins to drift, hold firm to their values despite external pressure. Boards with weak agency often react slowly, focus inwardly, and become preoccupied with paperwork over reality.

King V

The arrival of the King V Code on Corporate Governance underscores how agency and governance must evolve in tandem with broader expectations. King V sets out an outcomes-based model of governance emphasising ethical leadership, value creation, conformance and legitimacy. It highlights ‘integrated thinking’ – recognising that organisations are embedded in wider economic, social and environmental systems and are therefore expected to create value beyond financial returns.

What this means for agency is clear: strong agency requires the board to act with regard to those wider systems, to steer in a context where sustainability, digital governance, stakeholder relationships and legitimacy are front and centre. The disclosure-framework introduced in King V, and the ‘apply and explain’ regime, make agency visible and accountable. In short, agency is not just internal freedom to act. It must be exercised with transparency, evidence and consideration of the wider relationships in which the organisation sits.

Practical tool: an agency self-check for boards

Boards sometimes find it hard to recognise when their agency is drifting, so a simple self-check can help.

Real-world observations

Most boards overestimate their agency until something exposes the gap. It might be a failure, a crisis, or an external review. What they discover is that key elements had been slipping away – incomplete information, soft group-dynamics, over-dependence on the executive.

A board’s agency is only as strong as its informal spaces. The corridor conversations, the chair’s one-to-ones with the CEO, the tone of pre-meetings, the expectations quietly carried about challenge and dissent – these informal structures often determine how strong the board’s agency really is.

Bearers of bad news determine agency long before papers do. Boards with strong agency hear about issues early: emerging threats, culture shifts, staff concerns. Boards with weak agency only hear about issues when they are fully formed.

Agency often collapses gradually, then suddenly. It is not one big moment of failure. It is the accumulation of small avoidances: a paper unchallenged, a risk appetite unreviewed, a CEO report that becomes shorter and rarer. By the time people realise something is wrong it feels sudden.

Building agency deliberately

Agency does not develop by accident. Boards need to revisit their constitutions and schemes of delegation: is authority clear, or overly dispersed? They need to redesign agendas so that a meaningful portion of time is devoted to shaping the future rather than reviewing what has passed. They need to improve the quality and symmetry of information: do we see the same reality that the executive does?

Behavioural norms matter a great deal. Curiosity, constructive challenge, dissent, candour: these create the conditions in which agency grows. Capability matters too. Investment in development, peer-learning, and board evaluations that explicitly look at agency as a dimension are critical. And the chair sets the tone. Their approach to leading the board, working with the executive, and modelling confidence and humility has a disproportionate influence on the organisation’s agency culture.

Agency as the missing lens

Boards face rising expectations, but many operate with constrained agency, either through structural ambiguity, cultural hesitancy, or information gaps. If boards are to rediscover their purpose and step into their strategic role, they must build their agency with intention.

Agency is not the same as authority or power. It is the capacity to act purposefully and well. A high-agency board sees clearly, decides wisely and intervenes decisively. In an era defined by complexity and rapid change, this may be the most important governance capability of all.