The CHRO Paradox — Part 2: Why Influence Isn't Power (And How to Get Both)

**Stacie Baird** (0:08)
I want to ask you something, and I want you to actually think about it a little bit before we move on.
If your head of HR, CHRO, Chief People Officer, VP, whatever, left tomorrow, and I mean tomorrow, no transition plan, no overlap, what would stop? Not slow down, not get harder, stop. For most organizations, the honest answer is not much, not immediately, because even though that role is carrying the transformation mandate, the culture agenda, the AI integration, the talent strategy, and the human, part of the human deal in most companies, they don't control the budget to fund it, the board access to protect it, or the authority to stop something that would undermine it. They have influence, they do not have power, and those are not the same thing.
In part one of the series, we mapped out the five paradoxes defining the CHRO role right now. If you caught that episode, you know, we talked about the influence paradox, the pay paradox, the diversity dynamic, the broken pipeline, and the aspirational ceiling.
Today, we're going deeper on the one that drives all the others, which is the C-suite gap, the space between where the CHRO, or True People Officer sits, and where the real decisions get made. And this one is painfully close to home for many of us. So we're going to talk about what has to change at the board level, CEO level, and in the seat for that gap to close. And there's work here to do on all sides. It's urgent if you listened at all to the first episode, then you know some of the statistics here. So I'm going to give you a few more statistics. You can look in the show notes for full citations. But I'm going to give you some numbers here. 70% of CHROs at large companies now report directly to the CEO.
21% are closely involved in AI strategy decisions. But that's low to me, 21%. And we're going to talk a little about that today.
70% of public companies reported increased CHRO board engagement over the last three years. That makes sense to me. I'm seeing that as well in my practice and even fractional work. 4.8 years average CHRO tenure, which is down from six years. But I think there's a lot of dichotomy there. I think in high growth companies, that's much shorter. 70% of HR budgets still fund operations, payroll, and traditional hiring.
2.5 times more likely to outperform peers with strong HR leadership. So if you have a company that has a really strong HR leaders that are strategic, that are in this seat, that are going to do the things that we talk about today, the result is a 2.5 times outperformance. And that's typically on top line revenue is the measurement of that fact or statistic. 56% of CHROs say that their orgs are not adaptable to change.
While that person, the seat, is being asked to lead it. So make the change, but most CHROs know there's not a whole lot of adaptability, but you're the one being asked to affect change.
62% of folks that were involved in a variety of studies, but this is in the workday research from 2025, 2026, specifically, 62% say people, process, and technology don't work together effectively. So this is misalignment. We talked about this in the last episode, and we're gonna talk about it more today. So I'm gonna give you some details on some of these facts and statistics that hopefully give you some context. Let's be precise about what we mean when we talk about authority, because I use that word, and the word gets used loosely, and that's really part of the problem. Influence is the ability to be heard, to be consulted, to shape the conversation. Authority is the ability to make something happen or stop something from happening without needing anyone else's permission.
CHROs and Chief People Officers, by and large, have the first influence and not the second, authority. And here's where the data gets real uncomfortable. More than 70% of CHROs at large public companies report to the CEO. On paper, it looks like a seat at the table. In practice, it looks like a very expensive advisory role. Again, I told you this statistic at the top, but it begs repeating. Only 21% of CHROs are closely involved in AI strategy. The person who's supporting and supposed to govern AI's impact on the workforce, the person who's managing the re-skilling, re-designing of the human-machine partnership, should be, but is not closely involved in the strategy conversation, only less than about a fifth of the time, right? 20%, 21%.
Guys, that's a problem. And when you look at where the HR budget actually goes, 70%, as we discussed before, at most organizations still fund ops and payroll and traditional hiring. Not transformation, not AI, not workforce redesign, but operations. Those things are important, but we're not having the big discussion around the investment into the transformation of the workforce, even though that is the work we're being asked to do. So we have a function that's being asked to lead that mandate with a budget that is mostly locked into keeping the lights on. And that's it. The seat at the table comes with a view, not with a vote. So that's the anatomy of the gap that I believe we're seeing and have been seeing widening in the 25 years I've been doing this for a living. So the thing that we really want to think about is to look at doing an audit of what this looks like. So let me give you some examples. So what does authority look like in a budget? HR owns tech, L&D, and people investment decisions. What authority looks like in headcount is final voice on org design and hiring strategy. In partnership many times with your COO, because they're impacted by those decisions, and you have a voice, an input, and a vote. On AI strategy, authority looks like co-architecting the workforce and technology roadmap. That is what authority could be. And then we get to the board. So I don't know about you, I've been going to board meetings for probably the last 15 years of my career. But a board that wants to have direct, regular engagement around the human capital aspect of the business, that's authority to the board. When we talk about succession planning, and that's probably one of the board's biggest concerns or pain points, whether you're going to have a transaction, whether you're a public company, whether you're private equity backed, it doesn't matter. But authority in the CHRO seat is planning succession with the board in conjunction with the CEO. Those are active conversations. There's a gap, and I think we all are feeling it as you understand what authority should be or could be. I won't say should, maybe it's not right for your organization. Maybe you don't want the results that provides. Maybe you don't want the outcomes that that would dictate. So the gap stays open, and we have people holding that gap open for a reason. The Conference Board's CHRO Board research, which was done in April of 2025, identified four consistent derailers that undermine the CHRO's strategic impact. So let's talk through that framework. Derailer number one, the administrative perception problem. Don't order the cake. Let them eat cake, whatever you want to call it. That's a story that I've shared many times about the administrative function of this practice and the view of the practice. That boards and C-suites still largely perceive HR as an admin function, even when the CHRO is still doing transformational work. The framing in the boardroom is often HR runs benefits, HR handles compliance, and manages the headcount.