Episode 2 - Governance in a Crisis: Are We Responding with Intention or Reacting from Pressure?

In this episode, Lisa and Adam explore how Boards respond under pressure — and whether we’re seeing considered responses or reactive decision-making shaped by past crises.

With rising global uncertainty and supply chain pressure, the conversation turns to what’s really driving decision-making in Boardrooms.

Is urgency being confused with importance?
 Are governance frameworks being applied… or bypassed?

And perhaps most importantly — how can Boards distinguish between a response and a reaction when both can look the same on the surface?

Transcript

SPEAKER_00 0:06

Well, welcome once again to Off the Record, a podcast full of governance conversations that don't make the minutes. I'm Adam Coonan, and I'm here with Lisa Kelletta. We are both specialist governance consultants. Between us, we bring different lenses to governance: policy, regulatory, legal, economic, ESG, and a big topic of our conversations behavioural. In this podcast, we explore what is really driving decisions inside boardrooms, not just the structures and frameworks that I like a lot, but the dynamics, tensions, and conversations that sit underneath them where things really cook. Everything we share is drawn from our experience working with boards, chairs, and executive teams. And it's important to say that these are our perspectives. They don't constitute legal advice or formal governance guidance. This is about opening up conversations that shape decisions in practice, not just where and what gets formally recorded. We generally like to highlight the topical. And in that vein today, we are going to discuss governance in a crisis. Lisa, how are you?

SPEAKER_01 1:19

Hey, I'm good. Thanks, Adam.

SPEAKER_00 1:21

We're seeing a lot of pressure building up across supply chains at the moment, particularly around fuel and energy, given the much publicized events around war in the Middle East. But as 456 in Squid Game famously said, we've played these games before. You only need to go back to COVID to know what I mean. And then if you're not too old, you can go back as far as I don't know, global financial crisis, Y2K. But all of these things, crises, that is, raise really important questions for boards, particularly as they look at generally what goes with that rising costs in the businesses that they govern. Are we seeing considered responses to crises or reactive decision making starting to creep back in? Where do you think we should start with this, Lisa?

SPEAKER_01 2:18

Oh, look, thanks, Adam. Um let's get started with what's unfolding more broadly. I think that's a really good place to start. We're seeing increased pressure across fuel supply logistics and cost structures. And understandably that's creating a level of concern across organizations. There's a little bit of cross-messaging that we're having as we're hearing as well, where there's ceasefires, there is, there isn't, there isn't. But what's really interesting to me is not actually the disruption itself. Um it really is more for me about how boards respond to disruption. Because you're right, we have been here before. And I think the real question sitting underneath all of this is are we responding with intention or are we actually reacting from memory and from um conditioning from past dynamics? And I think there's a little bit more than that going on that some of us may or may not be recognizing right now. And so I kind of think about it from that context. Um, yeah. So I guess Adam, from your perspective, how are you seeing boards navigating that tension right now?

SPEAKER_00 3:27

Well, yeah, I mean, I just to confirm, I think that's exactly the tension. Because in theory, governance frameworks are designed to deal with uncertainty, but in practice, crisis introduces urgency and the potential for fear and knee-jerk reaction. And I think also urgency has a way of compressing decision making, like what we saw during COVID, you know, when decisions are made faster than usual. And while sometimes that's entirely appropriate, at other times uh it comes at the expense of a usual level of inquiry and rigor. And I think that's what we're starting to see now, you know, earlier signs of a similar dynamic. Um do you think boards are at risk of falling back into those same patterns that we've seen in the past, Lisa?

SPEAKER_01 4:19

Look, I do. I'm actually already seeing it. And it's not being what's said out loud so much. It's that many boards are, I think, still carrying the imprint of the most recent memory dynamic, which I think happens to be COVID. You know, the speed, the urgency, the need to act quickly. And I think as part of that as well, you know, there are small uh elements of messaging that is coming from government and and whoever else. You know, the fuel's getting expensive, maybe work from home and things like that. And so what I'm finding is that because of that, um, you know, the speed, the urgency, the need to act quickly to react. And um, you know, I think that that's where, from an, you know, I guess an energetic perspective, or from a focus perspective, um, things are heightened. And while it served a purpose at that time, it also, I think, for that, you know, the COVID example, it reshaped how organizations or how decisions were getting made under pressure. And so now when a new disruption comes in and a new disruption emerges, there's almost this kind of conditioned response, or dare I say, even conditioned reaction. And instead of pausing, assessing, responding, I think more and more I'm seeing in boardroom environments that they're moving straight into urgency reaction, containment. And of course, with that, there's a risk, and that is that we bypass the very governance structures that are designed to support decision-making quality.

SPEAKER_00 5:59

Yeah.

SPEAKER_01 5:59

Um, you know, do you think, Adam, that the boards are consciously aware of that shift?

SPEAKER_00 6:05

Well, yeah, I think some are, particularly ones that have had that continuity for some period of years and have been through crises. But many probably aren't consciously recognizing it even if they even if they have. Because from a governance perspective, there's always pressure to act. Um, you know, particularly when there are, I guess, other goals, whether that's market pressure, stakeholder concern, or broader economic conditions driving what goes on in achieving those goals. In situations like this where the variables are global and uncertain and evolving, there's there's no complete information set. And we don't know, I guess, not to just use Iran as an example, but we don't know when the conflict will end or whether it will escalate. And the messaging we get is in a 24-hour news cycle, uh, going to both extremes, and it doesn't paint a particularly clear picture. So boards are being asked to make decisions in an inherently incomplete environment, and I see or an incomplete informational environment. And I see the psychology elements of all of these uh are as challenging as they are, fascinating. Um with the behavioral governance lens, Lisa, what actually distinguishes a response from a reaction in those moments?

SPEAKER_01 7:28

Yeah, a really, really good question, Adam. Um, for me, it comes down to intention and awareness and getting really, really clear on what the difference is between a response and a reaction. So um a response is grounded, it's considered, and it still engages the governance framework. So there's this level of self-awareness around responsiveness. And a reaction, of course, is actually driven by urgency, often influenced by fear and bypasses structural thinking. So there is some really, really clear um, you know, red flags or some really, really clear elements to how uh how boards and how these decision-making environments are actually navigating through this. But there's a really critical part here, and that is in some respects, both can look exactly the same on the surface. Yeah, look the same, decisions are still made, actions are still taken, but the quality of thinking underneath them is completely different, and that's where governance either holds or it actually starts to fracture. Um, so yeah, so I guess from your perspective, um, Adam, how should boards be thinking about that in terms of accountability?

SPEAKER_00 8:48

Well, I think from an accountability perspective, it always comes back to discipline, crisis or not. Um, even in uncertain environments, regardless of the issue or crisis, consistent behaviour adjusted appropriately for a particular issue or situation in the court, you know, it's really the cornerstone of effective decision making. So boards still need to be clear on what they know, what they don't know, uh, and what assumptions they're making. But importantly, they need to also ensure they're still asking the right questions so that doesn't just go out the window. So not just responding to pressure in um an erratic or inconsistent way, but um but in a in a clear way that doesn't forget all of the things that make good or right decisions. Because once that discipline starts to erode, decision quality tends to follow. Lisa, when you step into organizations in these environments, what are the things that you're looking for?

SPEAKER_01 9:54

Yeah, I um there's a couple of things I look for, and and just on what you said, um one of the things that comes up for me around that is the difference between being really clear on what you can control and what you can't. And and for me, um applying a really, really great governance lens and having that self-awareness and you know that collective awareness around whether we're responding or reacting right now, um, around what we can control and what we can't is really important. Yes, because you can control that decision-making environment and its effectiveness. And so there are a few things that I always look for in these environments to answer your question around, you know, what are we looking for from a decision-making perspective? The first thing I look for is are we slowing the decision? Are we slowing down the decision just enough to engage proper thinking? The second is are we clear on what is known versus what is assumed? And as part of that, you know, that lens around what can we control and what can't we control, what should we control and what you know what will we, or you know, how will we actually jump in and control what we can versus what we can't.

SPEAKER_00 11:12

Yes.

SPEAKER_01 11:13

And then then, of course, there's this um this lens or this overlay around actively testing whether urgency is real or is it just perceived? Because we all naturally, you know, especially when we're in a collective decision-making environment and we've been around each other for a long time, we know, like, and trust each other, but we can actually get caught up with this group think piece. Um, and so are we actively testing whether the urgency is real or just perceived? And what can we appropriately flex to recognize we don't have the full picture before we take something to the point of no return, or we're making decisions on a kind of ill-informed basis?

SPEAKER_00 11:55

Yes.

SPEAKER_01 11:55

Not all pressure requires immediate action. Sometimes pressure is pressure, and one of the biggest mistakes or the biggest risks in these environments is responding to noise instead of responding to signal. And if boards aren't conscious of that, aren't really aware of that, can't see themselves in that light, they can very quickly move from governance into reaction.

SPEAKER_00 12:21

Yes, yeah, absolutely. I hear you. Uh the the the the real or perceived urgency is so key. Uh, I think in the uh famous words of Edward Albee and Who's Afraid of Virginia Wolf, it's uh truth or illusion, uh to put it another way.

SPEAKER_01 12:39

Yeah, absolutely, absolutely.

SPEAKER_00 12:41

But but you know, in other words, what you're saying is that in reality, crisis doesn't remove the need for governance. If anything, it amplifies it.

SPEAKER_01 12:50

Yeah, yeah, absolutely. And the decisions made in these moments are often the ones that define organizations long after the disruption is passed. And more often than not, it's the disruption itself that determines the outcome. It's how we respond to it or react to it. And those, Adam, are the exact conversations that don't typically make the minutes.

SPEAKER_00 13:16

Well, um, that's perhaps a good point to pause. Uh, and uh that's what we'll also continue to explore next time and in future episodes of the record.

SPEAKER_01 13:26

Absolutely. Thanks for joining us.