A few years ago at Davos, the term polycrisis entered the global lexicon, describing a world where multiple crises interact in unpredictable and complex ways. Today, we’re witnessing something even more intense: a shift from polycrisis to ‘hypercrisis’, where these crises don’t just intersect, they accelerate one another, creating cascading effects that are increasingly difficult for companies and investors to anticipate or control.
From geopolitical instability and climate shocks to technological disruption and social fragmentation, the complexity facing corporate leaders is growing exponentially. Just consider how US tariffs, supply chain fragility, energy market volatility, and climate-driven disasters now collide to create a web of risk that no single strategy can untangle. These aren’t isolated events, they’re interconnected, reinforcing each other in ways that defy traditional risk models.
In this environment, strong corporate governance is not just a compliance requirement, it’s a frontline defence strategy. It’s the foundation of resilience, adaptability and long-term value creation.
Why governance is a strategic priority
Governance has always been the bedrock of ESG, though in recent years it’s often been overshadowed by more high profile and pressing issues like climate change. But in 2025, governance is reclaiming its central role. Strong boards are essential for navigating volatility, making sound decisions under pressure, and maintaining stakeholder trust in a hypercrisis world.
Also read: Beginning or ending with governance
The pace of change is accelerating. Boards that cling too tightly to caution risk being outpaced by more agile and adaptive competitors. Conversely, those that surrender critical oversight in favour of following a visionary leader without applying rigorous challenge or checks on authority are equally vulnerable to failure.
In a hypercrisis world, the ability to govern effectively is not just a competitive advantage — it’s a survival skill. Governance is what enables companies to respond to disruption without losing their strategic direction or ethical compass.
The cost of weak governance
Poor governance can destroy value fast. It invites regulatory scrutiny, investor backlash, reputational damage, and operational instability. These risks are amplified in a world where crises are interconnected and accelerating.
Tesla offers a cautionary tale. While the company thrived on innovation and disruption, as widely reported, its governance structure, dominated by insiders and lacking effective oversight, has struggled to contain the fallout from its CEO’s political entanglements, customer protests, and performance issues. The board’s failure to apply meaningful checks on leadership has undermined long-term shareholder interests.
But Tesla is not alone. Other companies have faced similar challenges when governance structures failed to keep pace with the complexity of their operating environments. From tech giants grappling with AI ethics and misinformation, to energy firms navigating the transition to renewables amid geopolitical shocks, the lesson is clear: governance gaps become value gaps.
What boards must do now
To lead effectively in the age of hypercrisis, boards must evolve. That means:
- Strengthening oversight of emerging risks, including climate, cyber and geopolitical threats.
- Ensuring board diversity in skills, backgrounds, and perspectives to better anticipate complex challenges.
- Embedding foresight and scenario planning into strategic discussions.
- Challenging executive leadership constructively, especially when decisions carry reputational or systemic risk.
- Engaging meaningfully with stakeholders, not just shareholders, to build long-term trust and legitimacy.
Governance must move from a reactive, compliance-driven mindset to a proactive, strategic one. It’s not just about ticking boxes, it’s about asking the right questions before the crisis hits.
Looking ahead: Good governance as a strategic asset
As the hypercrisis deepens, governance will only grow in importance. Investors, regulators and consumers are demanding more transparency, more accountability and more resilience. Companies that treat governance as a strategic asset, not just a legal obligation, will be better positioned to lead through uncertainty.
The question for boards and executives is no longer whether governance matters, but whether their governance is fit for the future.
