What board directors should learn from Post Office scandal governance failures: Barry Gamble
The Horizon Post Office scandal saw hundreds of postmasters wrongly prosecuted for theft and fraud due to mistakes that were actually the fault of an accounting system.
A governance failure on steroids maybe but what might we learn to apply to other boardroom situations?
Good boards thrive on transparency, scrutiny and challenge. Otherwise they become too internally focused, unable to question long-held views or a course of action and overly fixated on protecting their own reputation.
Part-time non-executive or board directors are critical to a properly functioning board. They should be curious and questioning so the board does not become an echo chamber to the views of the executive or a dominant director.
But agendas are full to overflowing with compliance and prescriptive best practice. Board directors have limited bandwidth and energy so it is vital that space and time is allowed, facilitated by good chairing, to consider what is not on the agenda but which could be a risk or develop into a material risk. What’s hidden in plain sight ?
Formality and process are good ways to start the conversation but can also stifle action and follow through. The Post Office trumpeted its governance credentials but the Emperor wasn’t wearing a stitch.
Even board reviews may serve to distract. Too often boards confuse an enthusiasm for compliance with ethics. Spending time ticking boxes, rather than focusing on culture, may miss the elephant in the room.
What might be going on in your own board of which you are blissfully unaware? Or worse still; which issues have you ask about and been given seemingly ‘satisfactory’ answers on that don’t tell the whole picture?
Little things provide clues to wider cultural failings but these can be hard to surface. Even developing the narrative to become part of the board’s attention bandwidth can be a challenge.
If as a board director you have posed questions about an issue, but you remain troubled, what do you do ? Do you continue to ask questions? You may subsequently be seen as the unsung hero but also run the risk of being labelled a ‘troublemaker’ or no longer a team player.
You could resign but you will usually not have control of the narrative in any subsequent board statements. If you are a serial board director you may not want to give up fees or to run the risk of being a problematic hire for other boards; you are compromised.
Equally if you stick around doggedly probing, such action seldom breaks out into the public domain because of confidentiality and collective board responsibility.
The only way that changes is if you persuade the board to your view or you break confidentiality, with the risk of being sued.
Boards, supported by all the directors, should be primarily focused on progressing the business but governance blow-ups do occur and are not uncommon.
So it is time to ask; what’s going in your board and what are you doing about it so as to avoid a blow-up?
Barry Gamble is an experienced board director who writes, speaks and leads debates about issues challenging boards. He is chairman of Boardroom City Debates, a member of the 2025 Institute of Directors Commission exploring the role of non-executive directors and of the 2024 IoD working party which published the report ‘The Post Office Scandal - A failure of governance’.