Boards Need a Failure Strategy

Every board has a Risk Matrix. At least they should have. And a Risk Committee. I've yet to work with a board that has a Failure Strategy.

That gap is starting to matter. And not from a PR nightmare perspective. Rather, from a how will remain into the future perspective.

Last week I wrote about what psychological safety actually enables inside teams. I've suggested five questions that can turn a 'failure' into a valuable lesson. I wrote about the uncomfortable truth that most “fail fast, we've got your back” rhetoric collapses the moment something actually does fail.

Yet where is the Failure Strategy actually set?

The boardroom.

The Skills Matrix was built for a world that no longer exists. And that can be said for many existing processes and procedures.

Boards are recruiting harder than ever for future capability. At least they should be. Digital literacy, cyber, ESG, AI, and, to be honest, the skills matrix has never been more crowded. Yet most boards are still assembling their matrix by looking backwards: what a candidate has already done, in roles that already existed, in conditions that no longer apply.

CVs are a record of competence. They tell you what someone has survived. They are often not forthcoming about failures and what a candidate did to survive. The latest in VC funding? An investor wants to know that you actually failed and bounced back! Sometimes more than once. It's a test of resilience and determination. The last time I read a wad of CVs, they were about brilliance. Not problem solving.

The Global Student Entrepreneur Awards (GSEA) finals are taking place right now in Cape Town. One of the sections we judge is how the entrepreneur bounced back from a setback. Where is that information on most CVs?

That's the real gap opening up in board governance right now. It isn't a missing technical skill. It's the absence of a shared, deliberate stance on how the board will respond when a strategy doesn't work, a pilot underperforms, or a bet the organisation made in good faith turns out to be wrong. What will be the collective stance when the board is asked, “Why did that fail?”

Individually strong directors don't automatically add up to a board with good collective judgement. The real question isn't “does this person have the right experience?” It's “how does this person's thinking sharpen the group's judgement when the answer isn't black and white?”

What actually matters under uncertainty rarely shows up as a line item. Knowing which question to probe and when to let the room move on is a strategy. That is not measurable on a skills matrix. Yet this is exactly what determines whether a board learns from a failed initiative or simply finds someone to blame.

Boards without an explicit failure strategy default to one of two stances, and both are expensive.

The first - punish and bury.

The initiative that didn't work gets quietly dropped from the agenda. Nobody debriefs it. The executive who championed it learns a real lesson. The message is clearly, “Don't bring the board anything that isn't already close to certain.” Innovation is usually incremental at best, not because people stop having ideas, but because they stop bringing the risky ones forward.

The second - fail fast, in name only.

The language of experimentation gets adopted. Everyone speaks in terms of “pilots, MVPs or sprints”. But the governance underneath it hasn't changed. The moment a pilot genuinely fails, the room reverts to its old instincts: find the person responsible, tighten the controls, move on. Sometimes it's damage control. The rhetoric of psychological safety with none of the infrastructure to back it up. And remember that intentional failure is sabotage. Not doing anything is procrastination. Failure is the curriculum!

Boeing's board spent years signing off on a culture that prioritised schedule over engineering dissent. Then, when the failures came, they were catastrophic and public. Kodak's board approved digital imaging patents decades before smartphones existed, and still let a proven, profitable core business quietly veto the future.

In both cases, the individuals weren't short on competence. What was missing was a board-level mechanism for treating early failure signals as information. Not as embarrassments to be managed.

Contrast that with LEGO. When Jørgen Vig Knudstorp took the company back from the brink in the mid-2000s, one of the conditions the board backed was a systematic audit of what had actually failed and why. This included product lines, licensing bets and manufacturing decisions. All this, before a single new strategy was greenlit. The turnaround wasn't built on avoiding failure. It was built on the board being willing to look directly at it. Failure was the curriculum.

So what might a Board Failure Strategy actually involve?

A failure strategy isn't a slogan on a values slide on your website. It's a small number of standing commitments a board makes to itself before the failure happens. After it happens, it's too late to negotiate them calmly.

1. Failure gets debriefed, not just reported.

Remember the Top Gun article from last November? A line in a risk report, like “the project did not meet targets”, is not the same as a structured conversation about what was known, what was assumed, and what should change. The board sets the expectation that failed initiatives come back to the table with the same rigour as successful ones.

The conversation can actually be exciting and energising.

2. Curiosity is a director's job.

When management brings expert-backed certainty into the room, the board's role is to understand it well enough to interrogate it. Question, question, question! Sometimes the most expensive board failures are rarely the ones where nobody knew enough. They're the ones where someone did, and stayed quiet.

3. Judgement is evaluated as a collective output.

Succession and recruitment conversations start asking not just “what has this candidate done” but “how does this person change the conversation around the table?” especially when the room doesn't have enough information to be certain. Where is your director who is the “helicopter visionary”? The generalist who knows quite a bit about a lot of things? They exist! And you need them.

4. Ambiguity tolerance is named and protected.

Boards exist to bring a degree of certainty to an uncertain environment. But creating false certainty is itself a failure mode. A board that can sit with “we don't fully know yet” without rushing to an uninformed resolution is exercising a discipline, not avoiding one. In an ever-changing work environment, the only certainty IS uncertainty. The board needs a strategy that recognises this.

5. The failure conversation has an owner.

Someone on the board, maybe the chair, is responsible for making sure failures get a debrief, not just a write-off.

If boards are serious about recruiting for future capability, the brief has to change. Not just “find us someone with AI experience” or “find us a cyber expert”; those are yesterday's version of tomorrow's problem, and the board needs to be ahead of that.

The brief now is: find us people who are comfortable enough with not knowing that they'll ask the right question at the right moment, and be steady enough under pressure that a failed bet becomes data instead of a scapegoat hunt.

That's not a soft skill. It's the skill that determines whether an organisation actually becomes future-ready, or just says it is.

Boards don't need to be braver about failure. They need a strategy for it. They need to build it, name it and agree on it! Then Failure can be The Curriculum.

If your board is rethinking how it recruits and governs for a future that won't look like the past, I'd love to have a conversation.