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How to scandal proof your organisation – it starts with the Board

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We had the pleasure in hosting our recent Chair/NED lunch, with a perspective on corporate governance. We asked our guests the following question:

In the wake of a series of high-profile corporate governance scandals in the UK over 2023, the conduct of Bernard Looney at BP, Alison Rose at NatWest and the Post Office. Likewise, the US fared no better, with Silicon Valley Bank, Open AI and FTX all making headlines. – What lessons can Boards learn from these, to better manage any future similar situations?

The four key takeaways arising from the discussion included:

  • Don’t let your Board get out of touch with the business: It’s imperative for Boards to be more visible in their businesses on both a formal and informal basis, so they can pick up the vibes of what is really happening out there and ‘see the warning lights’ before a crisis happens. An ongoing theme of ‘the Board wasn’t aware’, is not good enough and no longer a valid excuse in today’s world. There should be no off limits with NEDs having the right to roam and be encouraged to ask the right questions and dig deeper when required.
  • Being a NED is a risk in itself: Gone are the days when it is just a tick box exercise in a benign world. You have to expect things will go wrong, scandals do happen, and the environment is both more complex and transparent with less places to hide. It comes down to the conduct of the Board, its capability and culture to handle crisis and mitigate risks correctly. At these times, it is critical to act decisively, know how to challenge and remember your actions will be judged in both the present and in hindsight.
  • Board composition: The limitations of group think, lack of diverse backgrounds, diversity of thought are all well-known variables, which Boards to a greater or lesser degree combat. The most important criteria are to have a strong moral compass and be brave enough to walk away when there is a dichotomy associated in doing the right thing. There is still room for improvement, for example how deep are Board’s discussions on managing risk and reputational risk and do all NEDs understand the risk dynamics at play?
  • Accountability: Ideally, Boards need to have reporting systems that are accurate, transparent and have a robust system for checks and balances. If problems do occur, root causes need to quickly be uncovered and acted upon. NEDs set the tone and purpose of an organisation therefore creating and cultivating a culture of honesty, integrity and ethical standards is paramount. Boards need to move quickly with change, for example how many Boards understand and are discussing both the enabling impact of AI as well as the ethical consequences?

Board failures are a reality of corporate life and history is littered with infamous names from Enron over 20 years ago to FTX today. Regulation has gone some way in countering this and changing governance from being inward looking and process driven to greater accountability and fiduciary duty across a wider range of stakeholders. Today’s Boards need to facilitate the right conversations, build cohesive, inclusive teams, and strive to attain common purpose.

It remains a moot point, if Boards or CEOs are found wanting, there remains limited penalisation for under performance, denial or overt dishonesty. Only stripping Paula Vennells (past CEO at the Post Office) of her CBE is hardly a message for reform.

Boards need ongoing training with the changing world, be it technology, geopolitical or risk consequences. Coupled with this, the impact of culture cannot be overestimated, how it is shaped, understood and translated into values and behaviours. Ideally, ultimately taking the right course of actions is a goal to which organisation should strive to attain and then always maintain.


Hoggett Bowers are very grateful to all our guests and a special thank you to:

Andrea DavisMDInvestcorp
Sir Andrew LikiermanNEDMonument Bank
Andrew WyllieNEDPersimmon Plc
Barbara AndersonNED ChairBritish Business Bank & Saffron Building Society
Bob BeveridgeNEDInspiration Healthcare
Caroline TerryMDUS Capital
Chris HitchenChairmanNuclear Liabilities Fund
Clifton MelvinChairmanUnum Limited
Grahaeme HendersonNEDThomas Miller
Graham WestgarthChairV. Group
Joe DochertyChairUniversity of Durham
John NeillChairmanUnipart
John StierChairmanDoctor Care Anywhere
Kevin MouattCEOEcolution Group
Mark FutyanNEDAnesco Limited
Nick SalmonChairScotia Gas Networks
Peter EmeryNEDenfinium
Susan HooperNEDUber