Is Your Board a Catalyst for Resilience?

Board Effectiveness and Board Performance

February 2025

The Credit Suisse crisis illustrates how a lack of board resilience can turn a difficult situation into an existential threat. The bank, once considered stable, rapidly lost the confidence of investors, clients, and regulators between 2021 and 2023. Deficits in structure, culture, decision-making processes and board composition prevented an effective response. As a result, after 167 years of independence, the bank had to be taken over by UBS in an emergency. While Credit Suisse’s board ignored crisis signals for years, Johnson & Johnson’s 1982 Tylenol crisis showed how a resilient board can not only overcome an existential threat, but even turn it into an opportunity.

When several deaths were caused by Tylenol capsules that had been tampered with and contained cyanide, the company faced a massive loss of confidence. But the board and senior management took decisive action: a full product recall, transparent communications and the introduction of tamper-evident packaging set new standards for crisis management and consumer safety. Within a year, Tylenol had regained its market share – an achievement that would not have been possible without a forward-looking and decisive board.

Resilience means acting quickly and boldly in times of crisis – with a long-term perspective. The comparison between Credit Suisse and Johnson & Johnson shows that resilience determines whether a board remains capable of acting in times of crisis or becomes a risk to the company itself. High-performing boards anticipate risks, make quick, well-considered decisions, and communicate clearly – all of which are essential for a stable future. Studies show that companies with resilient boards have a competitive advantage even in uncertain times. A board’s effectiveness is measured not only by its ability to govern in calm times, but also by its ability to make excellent decisions under pressure.

Credit Suisse is no exception. Many boards face similar challenges, according to our recent survey of boards of large public companies in the United States and Europe: 71% of chairmen, 76% of CEOs and 85% of board members see improved crisis preparedness as a key priority over the next 24 months. Respondents frequently cited the following gaps:

Board excellence: 74% cite deficiencies in structure, culture or decision-making processes.
Board development: 69% do not conduct effective crisis simulations.
Board evaluation: 81% see room for improvement in performance evaluation.
Board composition: 62% lack crisis management experience.
Leadership: 39% see a lack of transparency and reactive communication as a risk.

Board effectiveness is a critical factor in determining whether a company survives or perishes in turbulent times. High-performing boards not only prepare for emergencies, they actively build resilience by establishing forward-looking governance key drivers, embracing risk management as a strategic tool and fostering a culture in which problems are identified and addressed early. Resilience is not an end in itself, but a key driver of board effectiveness. Companies with resilient boards not only weather crises better, they actually turn turbulent times into strategic opportunities. Studies show that resilient boards respond more quickly to market changes, anticipate risks better and develop more sustainable growth strategies. A board’s true strength lies not in times of success, but in its ability to perform at its best under pressure.

Crisis is the new normal

Crisis is the new normal. For chairmen, CEOs and non-executive directors, this means that acting quickly and decisively is critical to the success of the company. An enterprise-threatening crisis is defined as “an unlikely, high-impact event that threatens the continued existence of the organization. These situations are characterized by uncertainty about causes, consequences, and possible solutions – and require rapid decisions”.¹ Even the best-managed companies are not immune to existential crises. There are many causes of such crises, which can be grouped into three main categories:

Strategic causes:

Industrial consolidation: Failing to prepare for mergers and acquisitions (M&As) can result in a company losing its independence.²
Technological disruption: New technologies can undermine established business models.
Regulatory changes: Failure to adapt to new laws in a timely manner can result in compliance violations and heavy fines.
Critical dependencies: Too much focus on individual customers or suppliers can quickly lead to bottlenecks if they are lost.

Operational causes:

Internal conflicts and inefficient processes: Unclear structures or cultural tensions can paralyze strategic initiatives.
Loss of key personnel: Lack of succession planning leads to loss of knowledge and uncertainty.
Creeping risks: Neglecting innovation, ignoring market changes, and failing to oversee the corporate portfolio will lead to a loss of competitiveness in the long run.³

External causes:

Scandals and misconduct: Fraud, corruption or ethical violations can cause massive reputational damage.
Sudden external shocks: Natural disasters, pandemics, and geopolitical shifts⁴ can abruptly disrupt business operations.

Not all crises are the same, but their dynamics have changed dramatically in recent decades. Boards must respond to increasing complexity and speed by integrating effective risk mitigation measures into their decision-making processes at an early stage.

The Board's Role in Crisis

Crises are part of business life – but the frequency and speed of risk events are accelerating. On average, companies now experience two confirmed cases of misconduct per day⁵, while fines in the US have increased by more than 700% over the past 20 years.⁶Then there are external shocks such as financial crises, geopolitical shifts or cyber-attacks. The coronavirus pandemic showed how quickly entire industries can be disrupted, such as the airline industry, which saw its business fall to almost zero in a matter of weeks. At the same time, complex supply chains and rising stakeholder expectations complicate a rapid, coordinated response. A crisis can turn into an existential threat in a matter of days or hours.

Proactive preparation is essential. Chairmen, non-executive directors, CEOs and senior management have a key role to play: their rapid and consistent actions shape the brand, reputation and share price. Even heavy fines or legal consequences can often be mitigated by a well-coordinated management team. This requires clear roles, smooth processes, and a willingness to make critical decisions early on.

Resilience starts at the top. The board of directors is responsible for strategy, risk management, and the “tone at the top,” i.e., cultural and ethical direction. Studies show that the resilience of the board has a significant impact on the resilience of the entire organization.⁷ It is critical that the board and senior management act with foresight, make bold decisions, and foster a culture in which risks are quickly identified and addressed. Companies whose boards regularly run strategic scenarios, work closely with management on risk assessment, and continuously improve decision-making processes are significantly more robust – and often emerge stronger from crises. An open culture that encourages constructive criticism and feedback makes it easier to identify risks early and take action.

Resilient boards create psychological safety by disclosing uncomfortable truths and worst-case scenarios. This requires board members to be not only professionally competent, but also emotionally stable. Different perspectives should be actively included to avoid getting stuck in entrenched thought patterns. Especially in acute crises, close communication between the chairman, the CEO and the entire board is essential. The chairman facilitates discussions and sets standards for leadership and governance. The balance between strategic foresight and pragmatic adaptation determines the board’s room for maneuver – and the company’s resilience.

Poorly managed crises also leave lasting damage to the board’s relationship with senior management. The media, regulators, and other stakeholders add to the pressure, which can easily lead to recriminations and mistrust. In this climate, efficiency and decision quality suffer. In addition, a crisis situation is emotionally draining: Careers are on the line, increasing stress and uncertainty. The impact of these factors on post-crisis performance is often underestimated.

Crises are inevitable. But how many chairmen and CEOs can confidently say that their boards are prepared for all facets of a crisis? We believe that proactive board preparation is a central building block for the sustainable success of any organization. By actively building resilience, the board not only increases its resistance to crises, but also strengthens its long-term competitiveness.

Key Drivers for Board Resilience: From Reactive to Proactive Governance

The challenges facing boards have fundamentally changed. Reactive governance is no longer enough as companies face not just isolated crises, but constant uncertainty: geopolitical tensions, cyber risks, regulatory upheaval and economic volatility demand a new way of thinking. While many boards focus on crisis preparedness, preparation alone is not enough. Effective board leadership means not only managing crises, but also viewing them as strategic opportunities. Reactive boards manage risk; proactive boards future-proof the company through effective board leadership that recognizes crisis signals early and acts decisively.

A reactive board deals with crises only when they become apparent. Decisions are made under time pressure and with incomplete information, wasting opportunities and undermining investor and stakeholder confidence.

A proactive board takes the long view, regularly updating its crisis scenarios and ensuring that the company is prepared for unexpected disruptions. They use resilience not only to mitigate risk, but also as a competitive advantage. In fact, studies show that companies with strategically aligned board resilience actually grow faster than their competitors in volatile markets.⁸

The shift to proactive governance requires a paradigm shift. Instead of waiting for crises to occur, boards should actively seek ways to strengthen the organization’s resilience and ensure its future viability. Global risks such as pandemics, cyber-attacks and geopolitical tensions make comprehensive risk management and the ability to deal with complex scenarios essential. Those who prepare in advance will not be overwhelmed by disruptive developments, and may even be able to use the momentum to their advantage. Chairmen and CEOs must drive this change and empower the board to actively shape the future. The following key drivers are particularly important:

Board development: Ongoing education and crisis simulations strengthen the board in challenging situations.
Board composition: A balanced composition that takes into account different competencies and perspectives promotes holistic decision-making.
Board evaluation: Regular external performance evaluations help identify blind spots and increase effectiveness.
Board Excellence Close, trusting collaboration between the chair and the CEO is essential for effective execution of leadership and corporate strategy.

By leveraging these key drivers, boards increase their resilience and ensure the future viability of the company.

The shift from reactive to proactive governance is not an option, but a strategic imperative-and a critical factor in high board performance. Companies that fail to take this step risk not only crisis vulnerability, but also long-term competitive disadvantage. Resilience is not built in the next crisis – it starts now. Strengthening structures and competencies early on enables better risk management and the targeted exploitation of opportunities. Proactive preparation is the key to stability and success. Resilience is therefore not only a factor in surviving crises, but also increases the board’s effectiveness in the long term. A high-performing board minimizes risk while using disruption as an opportunity to make the company sustainable for the future.

Checklist for Boards:

A board’s ability to ensure long-term resilience and performance begins with a willingness to engage in self-reflection. This checklist helps chairs and CEOs identify potential weaknesses and take targeted action. Each “no” indicates a need for action. Targeted action should be taken in these areas and, where appropriate, external expertise should be brought in to ensure sustainable improvements.

Board development

Do we regularly conduct simulations, such as crisis simulations or war games, and implement the lessons learned?
Are the board members actively trained in behavioral dynamics and conflict resolution skills?

Board composition

Do we have a competency matrix to identify and address gaps in expertise?
Do we regularly review whether our board reflects the diversity (e.g. gender, cultural background, thinking styles) that is critical for innovation and crisis management?

Board evaluation

Do we regularly conduct external evaluations of the board’s performance?
Have we systematically learned from past crises and integrated them into our long-term strategy?

Board excellence

Are our decision-making processes designed to ensure both agility and governance standards in a crisis?
Is there a clear, continuous flow of information between the board, the CEO, and senior management, especially in times of crisis?
Are our communication strategies with stakeholders consistent, transparent and based on trust?
Do we foster an open and constructive board culture to avoid groupthink?