When a major company collapses, the search for a villain begins almost immediately. Surely the blame must be applicable to a rogue chief executive, reckless trader or a fraudulent finance chief.

And yet, decades of our first-hand Kakabadse global research into corporate breakdowns suggests something far more unsettling. Boards rarely fail because of one bad actor or a single catastrophic decision. They fail because of predictable and repeatable patterns which quietly take root long before the headlines announcing devastating consequences arrive.

Governance failure is seldom sudden. Rather it is a slow drift, and most boards that preside over such collapses believe they are functioning perfectly well up until the point of crisis that marks their demise. We identify the eight most commonly commented causes of board failure:

1. Failure begins with ‘why you’re there’

The first crack in the system is often invisible but can be intercepted by asking why each director joined the board to start with.

In high-performing boards, the answer should be stewardship. The role is understood as demanding, time-consuming, and consequential. Directors prepare deeply, interrogate data, and accept the weight of accountability.

In weaker boards, this motivation shifts. A seat becomes a mark of prestige, a networking platform, or a final chapter in an executive career. These changes are subtle but decisive.

When the role feels symbolic, challenge becomes uncomfortable. Difficult questions are softened and executive summaries replace detailed scrutiny. Collegiality takes priority over oversight and by the time a crisis hits, the behavioural tone has been set years earlier.

Look back at collapses such as Enron and Carillion. Postmortems of these crises reveal boards that looked accomplished on paper, but were completely disengaged in practice. Prestige crowded vigilance out of the systems that should have been firmly established.

2. Independence on paper but not in practice

Regulators focus heavily on formal independence, non-executive status, tenure limits and committee structures.

But independence is behavioural, not structural. Even seasoned directors can become dependent on management for information, framing and interpretation.

In complex, global businesses, including fintech, aerospace, and pharmaceuticals, executives hold technical mastery and directors can begin to feel structurally disadvantaged. So key questions shift.

Instead of “What are we missing?” the board asks, “Can you clarify this?” Management airtime expands. Risk conversations focus on controls that are already in place, not vulnerabilities that are emerging beneath them.

Over time, oversight turns into unthinking endorsement.

The collapse of Wirecard in June 2020 offered a stark example. Its board met formal governance standards and independence requirements were met. But executives shaped the organisational narrative so completely that directors struggled to see beyond it. Capture does not require bad faith. Only over-reliance.

3. The CEO-chair as fault line

If there is a single axis on which governance turns, it is the relationship between the CEO and the chair.

When this partnership works, it allows robust challenge without destabilising the organisation. Roles are clear, authority is balanced and respect is mutual. When this isn’t the case, the outcome is paralysis.

Sometimes the CEO dominates and marginalises the chair. At other times the chair is passive or conflicted. Occasionally, the chair may even behave more like a senior adviser than as the leader of the board.

In each case, the board assumes someone else is providing the necessary tension.

After the scandals at Wells Fargo, investigations revealed a board that underestimated cultural and sales-practice risks, while leadership dynamics blurred lines of accountability. At Credit Suisse, repeated crises exposed deeper governance fractures at the top.

The most damaging assumption in any boardroom is: “If something were seriously wrong, someone would intervene.” Often, as case after case has proved, no one does.

4. The silence problem

In many corporate failures, the risks were not unknown—they were simply unvoiced. Or even voiced once, then quietly set aside.

Muted voices in the boardroom tend to follow a pattern: newer directors who are unsure of their footing; women or minority members navigating established dynamics; technical specialists whose warnings are seen as narrowly focused; compliance leaders raising inconvenient truths.

When discussion is dominated by a few confident figures, dissent can become socially expensive, while harmony begins to look like health. At Boeing, internal concerns about safety and engineering trade-offs struggled to gain traction before the 737 Max crisis.

At Toshiba, accounting irregularities persisted amid suppressed internal challenge. In retrospect, people knew, but they simply weren’t heard.

5. When results excuse behaviour

Boards often underestimate culture because it feels intangible. However, it’s culture that determines how people behave when incentives collide with judgment.

Before the emissions scandal at Volkswagen, aggressive performance pressure and intolerance of failure had become embedded. Similarly at Wells Fargo, extreme sales targets reshaped frontline behaviour in all-too predictable ways.

When high performers deliver results, boards can become reluctant to interrogate how those results are achieved. At the same time, whistle-blowers are marginalised and ethical breaches are reframed as communication failures. Intimidation is tolerated because performance is strong; destructive behaviours scale quietly, until they detonate very publicly.

6. The great disappearing responsibility

Boards are collective bodies. This is their strength, but it can also become their primary weakness.

Committees assume the full board is watching, while the full board assumes the audit committee has it all covered. Directors further assume that external auditors or regulators will raise the alarm if necessary.

In sprawling global firms, layers of governance multiply. Ironically, the more structure that’s put in place, the easier it becomes for responsibility to diffuse.

When Carillion collapsed, inquiries described warning signs that moved between committees without decisive ownership. Afterwards, investigators use a familiar phrase: “There was a failure to connect the dots.” The dots were visible, but no one picked-up the pen.

7. When process replaces judgment

Some boards aren’t reckless, they are hyper-compliant. Reports are lengthy, checklists are followed, and external reviews are commissioned.

But a dangerous shift occurs when the key question becomes, “Did we follow the process?” rather than, “Is this right?” This is where governance turns performative.

In the wake of the Volkswagen emissions crisis and the Wirecard fraud, investigators noted extensive formal controls. What failed was not the presence of rules, but a willingness to interrogate substance. Compliance became a shield as inquiry faded.

8. Groupthink: the calm before the storm

Few boards believe they are susceptible to groupthink but this challenge remains one of the most persistent precursors to organisational collapse.

It flourishes in homogeneous boards led by under-charismatic leaders, during periods of strong financial performance.

Decisions are reached quickly while alternatives are rarely explored rigorously. Sceptical directors self-censor in order to avoid being labelled as obstructive.

Before Enron fell, confidence was sky-high. Before Volkswagen was exposed, performance was celebrated. And before the crisis at Boeing, production and profit pressures overshadowed dissenting engineering voices.

Boards affected by groupthink often appear at their strongest mere moments before they fracture.

The hard truth

Across industries and jurisdictions, the same lesson recurs. Boards rarely fail because they lack frameworks, committees or codes. Instead they fail because behavioural dynamics go unchallenged.

Motives drift. Independence softens. Chairs and CEOs misalign. Voices fall silent. Culture distorts incentives. Responsibility blurs. Process substitutes for judgment. Dissent disappears. None of this is dramatic or unexpected in the moment.

And that is precisely the problem. Strong governance is not about adding another policy. It involves sustained and disciplined inquiry and disagreement. It is about inviting bad news early and establishing the clarity of role, especially between CEO and chair, as well as having the courage to test power, rather than orbit it.

The boards that endure are not those which are the most compliant. They are the most candid. And courage, not compliance, is what ultimately what allows organisations to prosper.

Andrew Kakabadse (1948-2025) was professor of governance and leadership at Henley Business School and a lynchpin figure in UK and global corporate governance. Nada Kakabadse is professor of policy, governance and ethics at Henley Business School.