The saying “recessions reveal what auditors did not” also holds true for corporate governance. After all, good corporate governance is about making sounder decisions and ensuring better management. In a booming economy, it is more difficult to distinguish between well and poorly managed companies as “a rising tide lifts all boats”. But when the going gets tough, the difference becomes clearer and the role of the board receives greater attention. If a company fails, it is rarely due to some operational inefficiency, but rather the design of the business model and if the company has followed a poor strategy, which is directly related to the board.

Corporate governance and a well-performing board cannot avoid all “mistakes” – some are only seen in hindsight. A series of poor board decisions and behaviour generally leads a company to disaster.