Lightning does strike twice

The wall

Start with a wall. Put a brick on it for every corporate failure you can name, from the Dutch tulip mania of 1637 to the cyber attack that stopped Jaguar Land Rover’s production lines in 2025. Build it a century at a time, then a decade at a time.

It does not slow down. By the 2010s the bricks arrive faster than you can read the names.

I built that wall to open a day I run for boards, and you can watch it above. It has sixty-nine bricks, and I certainly don’t think I have remembered them all. Every one of them had a board full of contented directors. Every one of those boards was following the rules of its day.

The rules arrive late

Under the wall runs a second lane: the rules that followed each wave of failure. The pattern is hard to miss.

• After the crash of 1929 came the US Securities Acts and the SEC.
• Coloroll and Polly Peck collapsed with accounts that gave no warning, and the Cadbury Committee was set up in 1991. BCCI and Maxwell came to light while it was working. Its report in 1992 began the UK corporate governance code.
• After Enron and WorldCom came Sarbanes-Oxley.
• After the banks in 2008 came the Walker review, Dodd-Frank and, in time, the Senior Managers Regime.
• After Grenfell came the Building Safety Act.
• After Carillion, and the reviews of audit and governance that followed it, came a new UK Corporate Governance Code. From 2026, Provision 29 asks boards to declare whether their material controls are effective.

The odd one out is the first. The Bubble Act was passed in June 1720, months before the South Sea crash. Historians increasingly read it as protecting the South Sea Company from rival schemes competing for the same investors. The first rule on the wall may have helped to inflate the bubble.

The rest are honest attempts to stop the last failure happening again. Most of them work, for that failure. The next one comes through a different door. Following the rules is necessary; that has never been enough to keep a firm off the wall.

The themes do not change

At the end of the animation the bricks leave the wall and sort themselves into six columns. Which column a case belongs in is my interpretation, and I am open to challenge. It is there to make a point, and most cases could sit in more than one. But the six themes keep coming back, century after century, and failure after failure.

Mania. The world will keep going up. Railway shares in the 1840s, British banks in 2008: everyone could see the prices, and nobody wanted to be the one who stepped off.

The unchallenged leader. One person, and a board that did not ask. In 1971, after the Pergamon affair, government inspectors concluded that Robert Maxwell was “not in our opinion a person who can be relied on to exercise proper stewardship of a publicly quoted company”. Twenty years later he was running two listed companies and their pension funds.

Performance beat judgement. Targets, bonuses and growth first. At Barings in 1995 the profits reported from Singapore were too good, and too few people asked how they were made.

Guardians who did not guard. Auditors, regulators, trustees, and the board itself. Carillion paid dividends while its contracts went bad, and its auditors were later fined by the regulator for their work.

Hidden in the extended enterprise. Suppliers, counterparties, chains nobody mapped. When Jaguar Land Rover stopped in 2025, thousands of other firms stopped with it, and the government guaranteed a loan to steady its supply chain.

The world was not meant to change. Models and funding that assumed it would not. Northern Rock’s funding depended on wholesale markets staying open. In 2007 they closed.

Why they repeat

None of the six is a failure of rules. Each is a failure of risk management as a skill, and success is what wears the skill down. A board that has done well for years has every reason to feel content, and contentment is where the next brick starts.

Each theme matches a skill a board can learn:

• The unchallenged leader is one way of seeing risk without a counterpoint. A board that fails to challenge is easy to dominate; one that hears more than one view of risk is not.
• Mania and performance are two ways of losing balance: too much appetite, or too much push to deliver. A board can see the pulls it is under and decide which one is winning.
• The guardians looked at the paperwork. A board can hold up a mirror and ask whether its controls changed anyone’s behaviour.
• The extended enterprise is a map. A board can ask who else holds its risk, and who would stop if it stopped.
• The world was not meant to change is a risk where the evidence is thin. A board can stop pretending to measure it, and govern it as a matter of judgement instead.

The upcoming Governing Risk essays will take each of these in turn – watch for their publication.

Is your risk management good enough to keep you off the wall?

Not “do you have a framework” or “does it comply”: every board on the wall could have said yes to both. Three harder tests:

1. Does it change decisions? Name the last time a view of risk stopped, slowed or reshaped something the board wanted to do.
2. Does the board know what it accepted? Could each director say what risk the board took on last year, and how much?
3. Would it see the next failure coming through a different door? Or is it built around the last rule, written for the last failure?

If the honest answer to any of them is no, the wall has room to admit more members.