Time is a governance risk factor

Time is a governance risk factor: The latest Director’s Diary has expert insights from Boglarka Radi on why delays in key governance areas matter more now than ever before. 

As a company secretary, much of what shapes my thinking and my view and understanding of governance is informed by trends that become visible through regulatory reports and judgments rather than isolated cases. When those are read together, certain patterns become difficult to ignore.

We can all see that recent shifts in regulatory expectations have not emerged in isolation. For example, in the United Kingdom, a series of high-profile corporate failures, including Carillion, BHS and the Post Office Horizon scandal, exposed weaknesses in board oversight and internal controls in line with the timely escalation of risk. In each case, inquiries and reviews pointed to issues that were known or at least visible well before the consequences became unavoidable. However, they were not addressed with urgency or challenge.

What I have found, when reading about these cases and reports, is that the time between issues being recognised and action being taken often becomes part of the story. The warning signs were often present, the information existed, yet decisions were deferred, risks were managed weakly and most probably uncomfortable questions were postponed.

Similar patterns can be seen beyond the UK. In recent years, high-profile failures such as FTX in the crypto sector have drawn regulatory attention. In each case, reviews pointed to warning signs that were visible but not addressed. 

Taken together, these events have reshaped how regulators think about time in the context of governance and actions from Boards. In the UK, both the Financial Reporting Council (FRC) and the Financial Conduct Authority (FCA) have increasingly highlighted that effective oversight depends on timely recognition, escalation and response. This is reflected in the FRC’s revised Stewardship Code, which places greater attention on active stewardship and the need to respond to risks and concerns. Governance is now judged by how quickly issues are recognised and addressed.

Risk that remains visible but unaddressed for extended periods is no longer viewed as an unfortunate consequence of complexity or uncertainty. It is increasingly regarded by regulators as evidence of weak oversight and insufficient challenge and therefore as a governance failure in its own right. Historically, regulatory oversight assumed a degree of lead time. Reporting cycles, periodic reviews and structured response plans were part of accepted governance practice. Boards were expected to identify issues, assess options and act with prudence. 

That implicit tolerance for time is now narrowing. Regulators are placing greater weight on the speed with which boards identify emerging risks, escalate concerns and demonstrate oversight while uncertainty still exists.

In the UK, this shift is also reflected in the revised UK Corporate Governance Code issued by the Financial Reporting Council in 2024. One of the most notable changes is the revised Provision 29, which will apply to accounting periods beginning on or after 1 January 2026. Under this provision, boards are required to monitor and review the effectiveness of the risk management and internal control framework throughout the year and to include it in the annual report.

Across jurisdictions, a common theme is seemingly emerging. Delay is no longer treated as neutral. Time itself is becoming a governance risk factor. Boards are expected to show that oversight is active, dynamic and responsive even where information is incomplete or outcomes uncertain. This does not mean that regulators expect unconsidered decisions. Proportionality and judgment remain central to good governance. However, the acceptable space between awareness and action has narrowed. Extended periods of observation without intervention are more difficult to justify, particularly where risks are foreseeable.

FTX collapse is a case study in bad governance

What is Provision 29?

The UK’s Stewardship Code 2026