Boards ‘sleepwalking’ into an era of permanent crisis, warns strategist

Boards are sleepwalking into the most volatile operating environment in half a century, according to strategist Roger Dennis. He warns many corporate leaders lack the experience and the mental frameworks needed to navigate what he describes as an era of cascading geopolitical and technological disruption. 

Speaking on the debut episode of Director Download, the new podcast from the Australian Institute of Company Directors (AICD), Dennis said contemporary leaders are confronting a level of instability not seen since the late 1960s and early 1970s – a period marked by inflation shocks, political unrest and global conflict.

“And unless they earned their leadership stripes in the late 60s, early 70s, they have no mental models or experience in dealing with this sort of volatility,” Dennis said. 

His remarks come as directors and executives globally grapple with mounting uncertainty driven by the war in the Middle East, trade fragmentation, AI, supply chain instability and climate pressures. 

But Dennis argues the greater danger lies not in the crises themselves, but in organisations continuing to operate with assumptions built during decades of relative geopolitical calm.

“One of the things that I’m currently interested in is the idea that, are we deviating from the norm or are we returning to the norm which was sort of pre-World War I?” 

“The reason that question is important is because I think it's a fundamental human condition to almost discount a previous crisis,” he added.

Instead, Dennis said there are two "quite fundamental structural shifts" in comparison to that earlier time. "The first is climate change, and the second is we now have machines that create faster machines without human intervention."

He believes businesses are now closer to entering a period defined by “polycrisis", overlapping structural shocks that amplify one another in unpredictable ways.

He pointed to Greenland as an example of how interconnected modern risks have become. Namely, what appears to be a geopolitical issue is also tied to climate change, melting Arctic ice, security concerns and emerging trade routes.

“These connections are not immediately obvious,” he said. “But when you start to peel back, you can see how they cascade and create change.”

For boards accustomed to conventional enterprise risk models, Dennis said the implications are profound. 

Traditional governance systems, such as periodic strategy reviews, static risk registers and annual planning cycles, are no longer sufficient in an environment where disruption moves faster than many institutions can respond.

“It was probably enough to look at enterprise risk, have a spreadsheet with different coloured cells, red, yellow, green, cover them off on a cursory examination every time the risk committee met, and then tick a box,” he said. “But now you need to have a new set of capabilities inside the organisation to understand how these different situations could impact the organisation.”

One of the most striking moments of the discussion came when Dennis described what he calls the “paradox of preparedness” – the tendency for organisations to acknowledge future threats intellectually while failing to build systems capable of responding to them.