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Philip Chronican warns businesses must challenge hidden assumptions as global shocks expose vulnerabilities across supply chains, technology and markets.
Building resilience requires understanding operational dependencies, highlighted by disruptions such as the CrowdStrike outage.
He argues organisations should strengthen systems, adopt AI cautiously and enable open debate to tackle productivity challenges.
“You can’t make any assumptions around the world,” the chair of NAB said on the sidelines of the AICD’s Australian Governance Summit. “You can’t even assume you can get on a plane from Sydney to Melbourne.”
For decades, Australian banks and businesses operated under a relatively stable global framework. The COVID-19 pandemic shattered that sense of certainty. Lockdowns halted travel and disrupted supply chains almost overnight. In the years since, wars and geopolitical tensions have exposed further vulnerabilities in global systems, from energy markets to digital infrastructure.
Philip Chronican GAICD has steered NAB through the turbulence. He says the greatest risks often lie in assumptions businesses don’t realise they’re making, from offshore operations to access to funding markets. Those assumptions now need to be tested again against a new wave of shocks.
“Just be really black and white with yourself,” Chronican told Company Director. “What are the extreme events that could go wrong?”
“The COVID experience has made us all more deliberate in our thinking around the implicit assumptions that we operate on in this business.”
Chronican pointed to a range of operational dependencies that many organisations rarely question.
“There are assumptions around cloud computing, assumptions around our reliance on some offshore centres, for example India,” he said. “You need to know what those assumptions are so you can see when they are being challenged… If you're going to have a resilient business in a changing world, you need to actually know the implicit assumptions and not be surprised by them.”
Some of those assumptions sit well beyond banking. “The Strait of Hormuz could be closed,” said Chronican. “No oil could come out of the Gulf… There are a limited number of undersea cables that carry all of our internet traffic. One of the threats Australia faces is if somebody cuts that. Understand that.”
While these risks may sound abstract, they translate quickly into operational disruption, affecting everything from payments systems to customer services.
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The challenge for boards and executives, argues Chronican, is understanding the mechanics of how their organisations actually function. That means mapping the systems, people and technologies that keep businesses running.
A recent software incident highlighted this point, when a 2024 global outage involving cybersecurity provider CrowdStrike revealed how dependent many organisations had become on a single vendor.
“We realised we didn’t really have a map of that,” said Chronican.
Understanding that “plumbing” – that is how payments flow, how servers connect and how systems rely on one another – is now central to resilience planning.
“If you don’t understand the mechanics of how your business operates it’s much harder to deal with a crisis,” he said. NAB’s response has been deliberately layered and includes building redundancy into systems, strengthening IT architecture and clarifying accountability across the organisation.
The same thinking is shaping the bank’s approach to AI. Rather than racing to the technological frontier, Chronican said NAB intends to adopt a more measured approach.
“We are going to be a fast follower,” he said. “If you can have an AI agent working in your business, you need to think about a performance manager. Where does it fit in your accountability framework?”
Chronican also addressed Australia’s productivity challenge, candidly acknowledging that what frustrates him most is how “various groups come out and take issues off the agenda” before any discussions even begin.
“You have to have everything on the table if you want to have a meaningful conversation,” he said. “We haven't yet got to the point where the collective will is strong enough to actually make an impact.”
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