Corporate governance is under stress at the level of its architecture, according to Jane Sadowsky.
She argues that the modern board model was shaped in the industrial era, when companies were hierarchical, risks were more contained and change moved more slowly. Oversight still runs through that structure today, with information flowing up through management and oversight flowing down from the board.
That model is now colliding with a different risk environment. Sadowsky says the most consequential risks move horizontally, across functions, across geographies and across organizational boundaries. Cyber incidents can quickly become legal, operational and reputational events. AI deployment can touch product, compliance, employee and brand risk at once. Geopolitical shifts can ripple across supply chains, regulatory exposure and market access simultaneously.
Boards have responded in familiar ways: more meetings, longer agendas, broader expertise and more outside advisers. But Sadowsky says those are adaptations inside the same framework, not a new framework itself. The result is a growing gap between the cadence of governance and the cadence of change.
Boards typically operate on quarterly meetings, scheduled strategy reviews and formal reporting. Many of the risks they oversee now evolve continuously. Cyber vulnerabilities can emerge overnight. AI systems can change through iteration. Geopolitical dynamics can shift in weeks, not quarters.
The problem is compounded by the fact that many risks now sit outside the company itself, in the systems it depends on. Cloud infrastructure, AI ecosystems, global supply chains and digital platforms can all create exposure for businesses that do not control them directly. A manufacturer, retailer, healthcare provider or financial institution may still depend on those systems every day.
Sadowsky also points to a second mismatch: board reporting is vertically aggregated, while horizontal risks do not always surface cleanly through those channels. What reaches directors is often a simplified version of a more complex reality. That can leave boards with too little visibility to oversee effectively, while too much involvement risks drifting into management.
The implication is straightforward. Boards are being asked to understand technology, AI, cyber risk, geopolitics and strategy at the same time, while their own operating model remains built for a different era.
For investors and directors, the message is not that boards are failing. It is that governance itself is reaching the limits of a model designed for a vertical world. The market has already voted for a more connected, faster-moving economy. Boardrooms that still think in quarterly silos may find that risk, like capital, has moved on.
The real issue is accountability. When a company depends on systems it does not control, somebody still has to answer for the exposure. That is where the taxpayer, the investor and the shareholder all care about the same thing: fewer layers, clearer responsibility and governance that keeps pace with reality instead of paperwork.
