It may seem counterintuitive but formal processes are not a panacea for good governance; post-mortems of Enron and WorldCom, or closer to home Centro, reinforce that these companies failed despite entrenched controls.
What leaders can learn from these high profile failures it that risk-taking is a cultural issue and that with respect to decision-making, a culture that encourages independence and debate is an asset.
Yet in many companies, disagreement continues to be seen as disloyalty.
Worse, as in the case of Enron, active collusion can be seen as a precondition for maintaining a seat at the table.
In his book Innovation Corrupted: The Origins and Legacy of Enron’s Collapse, Harvard’s Professor Malcolm Salter highlights sophisticated internal controls failed to impact the behaviour that led to Enron’s demise.