Essential questions for boards when performance indicators are green

Boards are often most alert when problems are visible. Yet governance failure rarely begins there. It more commonly takes root when dashboards are green, risks are reported as within appetite and assurance processes confirm that everything is under control.

Meetings conclude efficiently, confidence settles in and curiosity quietly recedes. Green indicators compress complexity. They signal status, but not fragility. They rarely reveal how close an organisation may be to a threshold, what assumptions are holding performance in place, or how quickly conditions could change.

The board’s most crucial tool when everything is ‘green’ is disciplined professional scepticism. This begins by shifting the discussion from reporting to anticipation with a deceptively simple question: “What would have to change for this picture to look different?”

Immediately, this encourages management to articulate dependencies, vulnerabilities and sensitivities. It also surfaces whether the organisation is actively scanning for change or merely reacting once indicators turn amber or red.

From there, scepticism should focus on two areas often obscured by green dashboards: judgement and absences.

On judgement: not all risks are measurable. Culture, ethics, conduct and tone often sit outside formal dashboards, yet they are frequently the precursors to more visible failure. Boards should be attentive to where management judgement is heavily relied upon, how it is tested and whether dissenting views are welcomed or filtered out. Where judgement dominates, professional scepticism requires independent corroboration, whether through internal audit, external assurance, employee feedback or other credible sources of insight.

On absences: reporting frameworks reflect design choices, prioritising what is easy to measure. Boards must be alert to what is missing: the behaviours, cultural risks and emerging threats that rarely announce themselves neatly. These often surface in system interfaces, workload pressures and informal workarounds. If they are invisible to the board, green creates false comfort.

This scrutiny of judgement and absences must also extend to the narrative itself. In green periods, boards are often presented with a coherent, logical story that explains performance. This narrative assurance, where the explanation is as polished as the result, can be seductive. The board's role is to stress-test this narrative before it hardens into an unchallenged story, which can create a shared blindness. Scepticism demands that boards occasionally break the storyline, asking for alternative explanations for good performance or seeking out data that might contradict the prevailing thesis.

This should in no way be interpreted as a distrust of management. Instead, it is about governing responsibly when reassurance is easiest. Boards that sustain disciplined scepticism during periods of calm are far better positioned to intervene early, before risk becomes visible, costly and irreversible.

Continuity provides another useful lens. Periods of leave or organisational change often reveal whether performance is driven by strong systems or by individual effort. If results remain stable when key people step away, systems are likely doing their job. If stability depends on constant intervention, workarounds or heroics, green indicators may be masking underlying weakness. Boards need to understand where resilience truly sits, and whether succession and delegation operate in practice as effectively as they do on paper.

Crucially, professional scepticism must be turned inward. Periods of apparent stability and smooth narratives can lull the board itself into a false sense of security, subtly discouraging dissent. The psychological comfort of consensus during good times can mute the very challenge required. This is where governance culture meets oversight: boards must actively guard against their own complacency and groupthink.

This requires institutionalising practices that disrupt unanimity. It can involve routinely inviting second-line managers or control function heads to present unfiltered views to the board, deliberately assigning a "devil's advocate" role for discussions on key green areas, or even commissioning targeted external reviews of well-performing operations precisely because they show no signs of trouble. The objective is to create a formal space for contrarian perspectives, ensuring the board’s own comfort does not become a vulnerability. The most effective scepticism is one that questions the board's own assumptions as rigorously as it questions management's reports.

This necessary scrutiny may create tension, but such constructive agitation is critical. Push too hard and the board risks being accused of overreach or operational interference. Pull back too far and it risks passivity. Professional scepticism helps navigate this tension. It is about asking questions that test assumptions, challenge comfort and surface risk early. Essentially, it supports oversight without collapsing the boundary between governance and management.

Importantly, this disciplined scepticism is the practical manifestation of the board's fiduciary duty of care. Inquiries and regulators do not accept comfort as a defence. They examine whether directors asked challenging questions when there was still time to act. Exercising scepticism when everything looks fine is integral to responsible governance and the foundation of sound business judgement.

As organisations operate in increasingly complex and fast-moving environments, the limits of reporting become more pronounced. Digital systems, automated controls and sophisticated analytics can enhance oversight, but they can also deepen reliance on abstraction. Boards must guard against the illusion that better data automatically produces better understanding. Data still requires interpretation, context and challenge.

When governance is mediated through layers of technology, the board’s duty is to ensure that the map still accurately reflects the territory of the business. Failing to do so risks placing unwavering confidence in a perfectly calibrated machine that is efficiently measuring the wrong thing. The greater duty of scepticism is to ask what such a system might be concealing.

Ultimately, green indicators are not the enemy. They are useful tools. The risk lies in allowing them to become substitutes for judgement. Effective boards treat green as the beginning of inquiry and not the end of discussion. To institutionalise this mindset, boards might formalise their approach to green by periodically adding a standard item to the agenda: Interrogating Stability. This dedicated session would move beyond report reception to proactive inquiry, structured around questions such as:

• What is the strongest contrary evidence to our current positive assessment?
• Which of our green metrics would be the first to turn amber under economic or operational stress, and why?
• When did we last receive unsolicited bad news or a dissenting opinion on a key area performing well?
• If we commissioned an independent, targeted review of one green area, which would we choose, and what would worry us most about the findings?

Good governance is rarely tested when problems are obvious. It is tested when reassurance is abundant and challenge feels unnecessary. Boards that maintain professional scepticism in these moments are far more likely to fulfil their oversight role with integrity, foresight and credibility, long before failure forces governance into the public eye.

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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