Collateral damage

Surely governing has become impossible?

The much coveted role of oversight has quietly become something the people currently doing it were never designed to do, and that is not because the people doing it are the problem. The regulated organisations they govern have operating constraints, exacerbated under pressure, that are damaging the very people responsible for running them. The habits formed as complexity persists go unexamined because everyone is too busy surviving the next requirement to notice what is actually happening.

At The WayFinders Group we repair the damage that organisations would prefer to ignore, intended and unintended, the kind that persists long after the formal process has concluded, the settlement has been reached, the statement has been made. Damage to integrity, to accountability, to trustworthiness and to the relationships between the people who govern and the people who are governed. Damage does not repair itself, and the illusion that things will right themselves is a misnomer. In our experience, the damage accumulating inside boardrooms right now is some of the most consequential and least examined damage in British organisational life.

In the last month alone, the FCA's overhaul of the Senior Managers and Certification Regime has moved through its most significant reform in a decade. The stated aim is simplification, but the effect is concentration: accountability is being narrowed to fewer people with clearer lines and less room to distribute blame. Provision 29 of the Corporate Governance Code has come into force for premium-listed companies, requiring boards, not their auditors, to make an annual declaration on the effectiveness of their material internal controls. Many unlisted organisations follow the Code as the gold standard for governance practice even though Provision 29 does not apply to them directly. The failure-to-prevent-fraud offence  places top-level commitment to prevention as its first principle. The  FCA's Non-Financial Misconduct rules go live in September, requiring evidence that reasonable steps have been taken to prevent bullying and harassment. And every director is now subject to mandatory identity verification under the Economic Crime and Corporate Transparency Act 2023.

Save for the fraud offence, which is a corporate offence, all of these obligations involve personal liability.

The issue is not the legitimacy of these changes. It is the accumulation of them, and the instability of the landscape itself. The Audit, Reporting and Governance Authority (ARGA) (proposed to replace the Financial Reporting Council (FRC) following the Kingman Review, which found it too close to the firms it regulated), was cancelled in January 2026 when the regulatory reform agenda shifted toward deregulation and growth. The mandatory Consumer Duty Board Champion was introduced, embedded in governance structures, and scrapped eleven months later. The same boards absorbing all of this are also carrying AI governance obligations, climate disclosure requirements, a rewired whistleblowing framework, and board packs that run to more than 200 pages in 25% of cases according to Board Intelligence's benchmarking. If directors read at roughly 30 pages an hour, half the pack goes unread before the meeting begins, calling into question how informed the decisions are when made.

We need to be honest about what sustained, compounding pressure does to human beings. The capacity to hold complexity, to hear an uncomfortable truth and respond with curiosity rather than defensiveness, degrades. Boards under this kind of pressure do not become more rigorous. They become more reactive, managing risk to themselves rather than to the organisation. The relationship with the executive becomes more adversarial and less honest. And in that environment, the thing most needed — truthful information flowing freely between the people who run the organisation and the people who govern it — is precisely what gets suppressed.

Boards are not immune to this damage. But board members rarely feel entitled to name it. The role comes with status and remuneration, and with the unspoken expectation that pressure is simply part of what they are being paid for.

A board needs to stop and quantify the damage that compounding regulatory pressure is causing inside it. Failure to take that step will result in poor decisions, deteriorating governance conditions, fractured relationships and unaddressed damage that compounds over time and becomes significantly more expensive to repair.

The IoD's recent NEDs Reimagined report is the most substantial examination of non-executive leadership since Higgs in 2003, concluding that what made a good board in 2003 is not what makes a good board in 2026. We would go further. The question is not only whether the right people are around the table, but whether the conditions exist for those people to tell and hear the truth. Integrity is not a value statement. It is a measurable condition, the alignment between what an organisation says and how it actually functions. When that alignment breaks down, trust breaks down, accountability breaks down, performance breaks down, and relationships break down. The whole organisation loses its capacity to function as it should, regardless of how many new rules are imposed.

The regulators are not wrong to raise the bar. But raising it on people already operating beyond their cognitive and relational capacity does not produce better outcomes. It produces more sophisticated compliance, which hides a multitude of sins while the damage inside continues unaddressed.

If you want to know objectively how your board is functioning, as against itself and its peers, that is exactly what our Organisational Repair Index (ORI®) is designed to show you. It gives your board an evidenced, independent picture of where the damage is and how significant it is, measured across nine factors.

Governing well in this regulatory landscape has become, frankly, impossible. The best a board can do right now is stop firefighting long enough to see what is actually happening with itself. That requires someone outside the room, someone not experiencing the same pressure, not carrying the same liability, and not invested in the same outcome, to tell you the truth about what they find. That is what we do. 

If this landed, Iet’s talk. Hit reply to arrange a conversation.

Leah
Founder, The WayFinders Group