A common characteristic of troubled or sick congregations is the trait of problem or conflict avoidance. This aversion to dealing with problems honestly because it may create conflict (and it probably will) creates a dysfunctional congregation because there is no venue for resolving real problems.
Pretending there are not problems or conflict when there are and refusing to deal with known problems is a crazy maker because the pretense that all is well is believed by those who don't know better, disbelieved by those who know better and confusing for those who don't know what to think which creates mistrust, confusion, lack of clarity, and relational breakdown.
A culture of conflict or problem avoidance starts with the church board who are responsible for ensuring the health of the church. Dysfunctional boards are afraid of dealing with conflict and therefore either avoid the issues altogether, spin issues with the congregation to paint a better picture than is reality, or find excuses for why the problems exist that are not accurate. The bottom line is that they don't want to deal with reality, don't want to be honest with themselves and don't want to disclose to the congregation the whole truth.
The problem is that avoidance does not work. First, when you avoid solving real problems they will resurface in a more virulent way. The root of the problem is not dealt with and like a weed that is not fully pulled out it will simply come back.
Second, while some people are fooled (above), others are not. They understand that there are problems that are not being disclosed and dealt with or that they are not being given the whole truth and these individuals lose trust in their leaders. Once leaders have lost trust with a segment of the congregation you have the genesis of even more conflict within the congregation. Others who are simply confused, as noted above, become pawns of those who are fooled or are not fooled and you have a recipe for chaos.
The sad thing is that boards that avoid dealing openly and honestly with problems or conflict become even more dysfunctional themselves because truth, honesty and openness create health while avoidance of these create more dishealth. It is not only a failure of leadership and cowardice but it is a violation of their Scriptural role to lead well and it contributes to greater dishealth in the congregation as a whole. Sadly, there are boards that do this over and over and over. One of the common symptoms of this are congregations that are plateaued or in decline: it is the inevitable result of poor leadership by boards.
How does one deal with a situation like this? It takes one or two courageous board members who will challenge their board to be honest and to deal with real situations in a healthy way - to refuse to avoid conflict and problems that exist. Or, members of the congregation who sense what is happening and challenge the board to do the same. Hard questions by board members or congregants at least bring the issues to the surface and gives either the board or the congregation the option of dealing with them.
In cases where boards and congregations continue to avoid problems or conflict there is one common response. The best leaders in the congregation as well as those who understand the dynamics quietly migrate out of the church. They are unwilling to stay indefinitely in a dysfunctional church system (which is what this is - like a dysfunctional family) because they know it is not healthy and will not be effective in growing healthy disciples. Nor do they want to bring their friends to a sick church.
Boards and congregations who don't honestly face their issues are in fact sick churches. Sick churches cannot grow healthy disciples. In fact, what they do is to create sick and dysfunctional disciples over time. Those who speak truth or challenge the "system" are often marginalized and find that they don't fit in - it is no different than a sick or dysfunctional family. So either one conforms and joins the system or they leave for a healthier congregation.
There are no easy solutions for sick boards or congregations. The greatest hope comes when they can face the fact that they need help and seek that help from outside their board or congregation - a neutral third party who can speak truth to their situation. But that takes a humility that sick boards often do not have. Usually when faced with truth they circle the wagons to protect themselves and avoid the hard work of honest evaluation and renovation.