Poor governance badly impacts funding, employees and performance, survey finds

Poor governance badly impacts some of the most crucial metrics in modern business, according to a new survey aimed at highlighting the main challenges faced by directors. 

The report, titled Boardroom Resilience in 2026: Independent research into board readiness, risk and strategy, surveyed 500 directors from companies of various sizes and industries in Q3, 2025. It found that at least 7 out of 10 directors believed poor governance had a net negative impact on:

• Organisational performance (74.8%)
• Employee satisfaction (75.8%)
• Investor confidence (77.73%)
• Ability to secure funding (74.8%)

All responses were given independently to each metric.

The most striking thing about the above figures is that the metrics they relate to are some of the most essential, non-negotiable responsibilities of corporate governance. Directors are in their roles to ensure a business can secure funding, perform well, please investors and keep its workforce happy. 

Overall, it is a good thing that so many respondents appreciate the negative impact bad governance can have on all four of these issues. The mentality is correct. 

Modern governance is a demanding environment precisely because it bridges the gap between success and failure. Much of the heavy lifting may have been done purely by CEOs in the past, with boards as a “rubber stamp” body, but the modern system requires directors to actively engage, using their core skills to act as an important check on company decisions. 

A good board directly impacts organisational performance through good decision-making, backed by extensive, open deliberation, and asking the right questions. 

The minute this effort begins to fail, it will show. Bottom-line figures will suffer, making investors wary of the company’s long-term potential, and thus its ability to turn a profit from future funding rounds. Meanwhile, employee morale will inevitably enter a period of decline, since workers lose confidence that their own jobs yield positive results and that their leaders have control of the situation. This often exacerbates a problem, creating demotivated employee cultures that can take years to bounce back from. Recent examples of companies that have been through this quagmire include aviation giant Boeing in the United States, and the national Post Office in the United Kingdom.

Another major figure worth noting from the report is that 85% of respondents felt confident in their board overall.

Taken at face value, this is also a good thing. It shows that, in general, those with decision-making power are aware of their main corporate challenges and still consider themselves and fellow board members capable of meeting them. 

There are some inconsistencies, however, in that when the report zooms in on boards’ readiness to tackle specific issues (compliance, AI, ESG, etc.) rather than just a generalised view, the percentages of confidence are far lower – around 35%. 

The paradox is concerning because it suggests that directors haven’t connected with specific issues as much as their “zoomed out” viewpoint might suggest. 

Combined with the figures at the top of this article, the conclusion would be that many directors know how important they are to their businesses, are confident that they are doing good work overall, but are experiencing shortfalls when it comes to the kinds of issues that will make or break a business’s adaptability in modern times. 

And this, in itself, is perhaps where the real challenge lies.

The potential impact of bad governance on corporate success is higher now than it has ever been before. Directors are, without question, active players in decision-making, and if they get things wrong, the first areas to suffer are the crucial metrics that can easily spook stakeholders. 

To ensure that bad governance doesn’t emerge strong enough to affect these metrics, boards need to get serious about the individual challenges that the report suggests need further examination. 

If boards haven’t found the necessary expertise or upskilled key personnel, their ability to manage risk and seize opportunities in key areas like AI, ESG and the more chaotic geopolitical arena, will be compromised.