I'm a new SWE Manager and I've been thinking alot about power dynamics since I got promoted. You would think that you can just tell you reports "hey you can be honest with me and speak your mind", but the difficult part about that is no one will take you at your word when you say that.
I'm still working it out but one thing I've found that helps is to crack some jokes with my reports. Like the other day I was having a one on one with a report where they were saying that they didn't like how ClientX was doing ThingY on ProjectZ. I could tell by his tone that he was trying to gauge my reaction before continuing, I interjected with a light joke about said client, basically telling him that I completely agreed with his sentiment. From there I noticed that things got much lighter and he was able to speak his mind more about the issue.
Was that the right approach? Who the fuck knows.