Mr Bühr, companies today have boards, statutory auditors, compliance teams, risk management departments and extensive internal controls. Why do serious failures still occur?

Every organisation experiences failures, not every objective is achieved, and people make mistakes. And I am not convinced that serious incidents are more common today than they were in the past. However, they are detected sooner, are documented more thoroughly and often become public.

The broader issue is that oversight and control do generally not perform well enough across organisations.

«Over the past 20 years, companies have added more control functions without adapting their governance accordingly.»

Even though companies have invested heavily in expanding their controls?

That is part of the problem. Over the past 20 years, companies have added more control functions without adapting their governance accordingly. There are now numerous checks in place, but basic questions often remain unanswered: Who does what? Who is accountable for which tasks? How do the different control functions work together? And who ultimately takes responsibility for the internal control system as a whole?

The result is a diffusion of responsibility. Nobody feels accountable anymore.

So, is this really an accountability problem rather than a control problem?

The two are inseparable. Responsibility for effective oversight and control ultimately rests with the organization’s governing body. In a Swiss company limited by shares, that responsibility lies with the board of directors. If oversight and control fail, there is thus both a control problem and an accountability problem.

Another problem is the disproportionate attention devoted to strategy: new markets, new products, higher revenues and greater profits. Execution of strategy and board decisions, and compliance and risk management often receive far less attention.

Why have repeated corporate scandals failed to bring about more change?

Over the past decade, we have not consistently developed and implemented governance models that meet today’s oversight and control requirements.

Boards also spend too little time, critically examining whether their own decisions are carried out. Are employees actually following the rules? Is that also the case at subsidiaries abroad? Do management reports reflect what is happening in reality?

«Too few people are willing to challenge decisions and processes independently and persistently.»

Have people lost the habit of asking difficult questions?

Critical questioning is not always seen and valued as a sign of acumen and professionalism. Too few people are willing to challenge decisions and processes independently and persistently. Yet that is a core responsibility of a board member. They must be prepared to ask uncomfortable questions and keep pressing for accurate and complete factual answers until they understand what is really happening.

Does that mean some boards have the wrong people on them?

This is certainly an issue. Nominations for governing bodies are often based on personal connections or existing relationships of trust. There should be much greater scrutiny of whether candidates’ professional experience, character, independence and willingness to challenge make them suitable for the role.

Particularly in large organisations facing significant risks, board appointments should follow transparent, professional selection processes.

What would that look like in practice?

Key roles should be filled based on clear selection criteria, with at least two qualified candidates considered for each position. The aim is to make a more objective assessment of who is best suited for the task.

An effective governing body needs a combination of strong and independent personalities, respected specialists and experienced executives. Getting that mix wrong comes at a cost.