Governing through uncertainty: acting before crisis confirms itself

By Nqobani Mzizi

Boards face a dilemma with no perfect resolution. Intervene too late and they are condemned for missing the signals. Intervene too early, probe too deeply, and they risk being accused of overreach. This tension defines one of the most complex responsibilities in governance: deciding when there is enough information to justify action.

The difficulty lies in the nature of uncertainty itself. Governance failure rarely announces itself through a single decisive event. It accumulates. Risk ratings shift. Control weaknesses recur. Cultural indicators soften. Strategic ambition is moderated. Regulatory correspondence increases. Performance variances are rationalised as temporary. Each signal, viewed in isolation, appears manageable. Taken together, they may reveal a trajectory that warrants intervention long before financial distress becomes visible.

Boards receive far more than financial numbers. Audit committees review internal control findings and accounting judgements. Risk committees track exposures against appetite statements. Social and ethics committees monitor conduct, culture and stakeholder impact. Remuneration committees assess incentive alignment. Safety and operational reports highlight incident patterns. Legal updates outline contingent liabilities and regulatory developments. None of these reports alone confirms failure. Yet uncertainty often resides precisely in the spaces between them.

The temptation in governance is to wait for confirmation. Confirmation feels safe. It may arrive in the form of an audit qualification, a liquidity breach, a regulatory sanction or a public controversy. Once confirmation arrives, intervention is justified and defensible. The difficulty is that by the time certainty is undeniable, the board is already responding to a situation that has matured beyond early correction.

Acting under uncertainty requires professional judgement. Directors must move beyond passive receipt of reports and into deliberate enquiry. This does not mean running the business. It involves testing the robustness of what is presented. It means asking whether recurring explanations mask deeper patterns. Scenario analysis should be requested where assumptions appear optimistic. It also requires probing whether risk mitigations operate in practice or only on paper.

The recent experiences of Tongaat Hulett and, before it, Steinhoff illustrate this lesson starkly. In both cases, extensive reporting frameworks, audit processes and board structures were in place. Yet accounting distortions and governance failures unfolded over time. The question these episodes leave is whether the available information was interrogated with sufficient depth while uncertainty still allowed room for corrective action.

These patterns underscore an important distinction. Effective boards distinguish themselves by asking the right questions at the right moment. The difference lies in discernment. An enquiry that clarifies trajectory strengthens governance. An enquiry that descends into operational detail weakens it.

King V reinforces this responsibility by positioning ethical and effective leadership, sustainable value creation and robust oversight of risk and control as core governance outcomes. It does not prescribe rigid procedures. As a principles-based framework, it requires boards to apply their minds independently and exercise objective judgement in context. While the duties of care, skill and diligence arise in law, King V emphasises that these duties must be demonstrated through disciplined, forward-looking oversight. That expectation necessarily includes the courage to intervene before uncertainty matures into visible crisis. This proactive stance is not aspirational. It is consistent with the legal standard imposed on directors.

The legal standard does not require directors to guarantee success. It requires evidence of reasonable care, skill and diligence. In moments of uncertainty, the question becomes whether the board applied its collective mind. Were concerns documented? Were additional reports requested? Was independent advice sought where appropriate? Were dissenting views recorded and considered? These steps reflect deliberate and active governance.

Uncertainty also tests the integrity of information flows. Boards depend on management to surface emerging concerns. Executives, equally human, may believe that an issue can be resolved internally before escalation. They may fear reputational consequences. They may interpret early signals as noise rather than a trend. Directors therefore carry a responsibility to create conditions where early warning is encouraged and where difficult information can travel without penalty.

This requires unfiltered enquiry. Boards must ensure that control functions such as internal audit, risk and compliance have direct access to them when necessary. They must be attentive to changes in tone, not only changes in metrics. They must examine whether the language used to describe issues shifts subtly over time, signalling complexity before it becomes crisis. Subtle shifts often precede formal confirmation.

There is a careful balance to maintain. Directors must avoid substituting their judgement for management’s operational responsibility. They are not appointed to manage daily execution. However, they are appointed to ensure that execution remains within acceptable risk and ethical boundaries. When patterns emerge across committees, when explanations begin to sound repetitive or when assumptions stretch plausibility, oversight demands more than reassurance.

Acting under uncertainty does not mean reacting to every fluctuation. Markets shift. Operational challenges arise. Temporary setbacks occur. The art of governance lies in distinguishing between volatility and vulnerability. Clarity is comfortable, but ambiguity demands judgement, independence and courage. Boards that navigate this tension effectively anticipate rather than merely respond.

By contrast, those that wait for certainty often find themselves governing retrospectively. The numbers confirm what intuition and fragmented signals had already suggested. At that point, the board’s role shifts from oversight to remediation. While remediation is part of governance, it is not its highest expression. Effective governance anticipates rather than merely responds.

Sustainable governance cannot rely solely on confirmed data. It depends on attentive directors who are willing to interrogate assumptions, synthesise disparate signals and insist on transparency before circumstances compel them to do so.

Governing through uncertainty is therefore not an act of impatience. It is an expression of responsibility. It reflects a board’s commitment to safeguarding the organisation even when evidence is incomplete. It demonstrates respect for fiduciary duty by refusing to equate silence with stability or reassurance with resilience.

Boards that act only once certainty arrives may protect their comfort. Boards that act when uncertainty first surfaces protect their organisations. In governance, waiting for confirmation is often the costliest decision of all.

* Nqobani Mzizi is a Professional Accountant (SA), Cert.Dir (IoDSA) and an Academic.

** The views expressed do not necessarily reflect the views of IOL or Independent Media.

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