By Tim Glowa
The boardroom table looks a lot different when the building is actually on fire.
Every serious board has done the work. Crisis simulations. Scenario planning. Risk registers with color-coded heat maps. Tabletop exercises where a facilitator walks directors through a hypothetical supply chain disruption or a cybersecurity breach, and everyone nods and goes home feeling prepared.
Then February 28, 2026 happened.
The United States and Israel launched airstrikes on Iran. Within days, Iran closed the Strait of Hormuz, the narrow waterway through which roughly 20 percent of the world's seaborne oil supply normally flows. Tanker traffic collapsed by 95 percent. Brent crude surged past $120 a barrel. Fertilizer prices jumped 50 percent. Shipping giants Maersk and Hapag-Lloyd suspended Middle East routes. The International Energy Agency called it the largest oil supply disruption in the history of the global oil market. According to UNCTAD's April 2026 rapid assessment (UNCTAD), global merchandise trade growth is expected to fall from 4.7 percent in 2025 to somewhere between 1.5 percent and 2.5 percent in 2026. The cascade hit everything from aluminum and plastics to food security and jet fuel.
Show me the board that had that specific scenario on the heat map.
The point is not to be glib about governance failures. Real crises do not announce themselves on schedule, and they do not look like your tabletop exercise. They hit faster, cut across more systems simultaneously, and create pressure no simulation can fully replicate. The value of crisis preparation is not that it makes you ready for the specific thing that happens. The value is that it builds the governance reflexes to act decisively when something completely different shows up instead.
Preparation Works. Just Not the Way You Think.
Crisis simulations and stress-testing your decision-making protocols matter. But the research is clear that what they build is not a script. It is capacity.
Work on board chair leadership published in the Journal of Management by Krause, Withers, and Waller (2024) found that directive leadership from the board chair, meaning clear structure, firm priorities, and controlled information flow, was directly tied to better strategic decision-making and firm performance during the COVID-19 crisis (Journal of Management). But only when the chair was not also the CEO. When the same person held both roles, directive leadership in a crisis showed evidence of negative effects. CEO/chairs under pressure tend toward strategic complexity rather than simplification, protecting their own information advantage and widening the gap between themselves and the board at exactly the moment the board's oversight is most needed.
What does this mean for boards that have not yet separated the CEO and chair roles? It means crisis preparation should include an honest conversation about whether your current leadership structure can actually function in a real emergency. Governance on paper and governance under fire are two different things.
Boards also need to rehearse the decision-making process itself, not just the content of possible crises. Who calls the emergency meeting? Who has authority to approve interim liquidity measures without a full board vote? What is the threshold that triggers a shift from normal oversight mode to crisis governance mode? If your board has to figure those questions out after the Strait of Hormuz closes or after a product recall hits the news, you are already behind.
Research published in Corporate Governance: An International Review by van Essen, Engelen, and Carney (2013) on European firms during the 2008 financial crisis found something counterintuitive (Corporate Governance). Boards with more committees, more independent directors, and more vigilant oversight structures actually performed worse during the crisis than boards that gave management greater discretion. The governance mechanisms designed to constrain executives in normal times became speed bumps when speed was what the situation demanded. The lesson is not to abandon governance rigor. It is to know when to shift modes.
What Actually Works During a Real Crisis
When the crisis is active, the board's job changes. This is where most governance frameworks go quiet, because most governance frameworks are designed for steady-state conditions.
Simplify fast. The research on competitive strategy during crises is consistent. Firms that simplified their strategic footprint, shedding complexity and focusing resources, outperformed those that tried to meet complexity with complexity. Boards need to push management toward clarity, not comprehensiveness. That means approving a tighter action plan rather than a sprawling one, and asking which three things matter most rather than cataloguing every risk.
Lead the room, do not just convene it. The board chair has to set the agenda with purpose, manage which information gets presented and when, and keep the board focused on decisions rather than deliberation for its own sake. Board members bring diverse backgrounds and strong opinions. That is a feature in normal times and a liability in a crisis if the chair does not manage it.
Give management room to move. Crisis conditions require executive discretion. The board's role shifts from monitoring and approval toward counsel and guardrails. Directors should be asking "what do you need from us?" more than "have you considered all the options?" Oversight does not disappear. It recalibrates.
Work the stakeholder picture. Von Post and Pozen's piece in MIT Sloan Management Review (2020) remains one of the most practical governance guides available (MIT Sloan Management Review). Directors should press management to get real-time intelligence from key stakeholder groups. Not a PR update, actual conversations. What are your major suppliers doing right now? What are institutional investors signaling? What are key customers planning? In a world where your logistics costs have tripled and your material inputs are constrained, your competitive position relative to peers is shifting in real time. The board needs to know what that looks like.
Interrupt the three classic traps. Harvard Business Review's work on executive and board missteps during the pandemic flagged a pattern that shows up in almost every crisis (Harvard Business Review). Teams settle for existing remedies. They defer to the leader. They agree to conform. A good board, led by a chair who is paying attention, interrupts all three politely and on purpose.
The Soft Stuff Is the First Thing Boards Sacrifice
Here is an uncomfortable finding most boards are not ready for. Research by Mukherjee and Krammer (2024) in The Leadership Quarterly followed more than ten thousand firms across twenty-one countries through the global financial crisis (The Leadership Quarterly). Board gender diversity fell. Female directors were pushed off boards. Female CFOs lost their seats. Even having a female CEO did not fully offset the slide, and neither did formal quotas or governance codes.
Boards under pressure tend to sacrifice the very things they said they valued. Diversity. Ethics. Employee wellbeing. Training budgets. Climate commitments. The language changes from "priority" to "let's revisit next quarter." A year later the board looks at itself and wonders how it got smaller and narrower than the one that went into the crisis. That erosion is a choice, even if nobody names it as one. The governance move is to put those items on the crisis agenda on purpose, early, in writing. Otherwise they disappear while everyone is busy being decisive.
The Crisis That Exposed What Boards Missed
The Hormuz crisis illustrates something important about how geopolitical risk has been treated in boardrooms. For years, supply chain diversification and geopolitical scenario planning sat on agendas as aspirational items. They were discussed, sometimes acted on at the margins, but rarely treated as urgent priorities when everything seemed to be functioning. Most boards carried exposure to Middle East energy and supply chain dependencies they had never stress-tested at anything near the scale of what is now unfolding.
UNCTAD's April 2026 assessment found that ship transits through the Strait dropped from around 130 per day in February to just six in March, a near-total collapse, and warned that the disruption is now the primary channel through which the conflict is affecting global trade. The ripple effects are not contained to energy. Fertilizers, plastics, aluminum, chemicals, helium for semiconductors, packaging materials. The list of affected inputs runs through almost every sector. McKinsey's earlier work on the Russia-Ukraine disruptions made the same argument about concentration risk (McKinsey). When one region carries outsized weight in a global input, a single political decision can stall a factory floor in Ohio or a chip line in Taiwan.
For most boards, the immediate governance challenge is not that they failed to predict this specific crisis. It is that when the shock hit, many organizations found themselves without the infrastructure to respond quickly. Unclear decision rights. Leadership structures that created bottlenecks. Scenario plans that had never been tested against second and third-order effects.
The Harder Work Is Before and After, Not During
Preparation matters, even though it will not save you from the specific scenario that actually arrives. Boards that had done serious geopolitical scenario work, even without modeling an Iran war specifically, had better instincts about which levers to pull when the world changed suddenly. They had relationships with management built on genuine information sharing, not filtered presentations. They had chairs who knew how to run a focused meeting under pressure. They had pre-established decision thresholds that did not require calling fourteen people to authorize an urgent financial commitment.
The recovery work matters just as much. Research published in Nonprofit and Voluntary Sector Quarterly by McMullin and Raggo (2020) on board governance during COVID-19 made a point that applies equally to corporate boards (Nonprofit and Voluntary Sector Quarterly). Organizations configured for stable environments experience the greatest disruption when a crisis hits and need to make the biggest adjustments. The question every board should be asking right now, regardless of industry or geography, is not just "how are we managing this?" but "what does our governance look like on the other side of this, and what needs to change?"
The boards that handle the next crisis better will be the ones that use this one to build different governance muscles. That means revisiting whether the CEO/chair structure serves the organization under real pressure. It means developing decision-rights protocols for crisis conditions, not just for normal-course approvals. It means building board-management relationships based on trust and honest information flow rather than performance and governance theater.
No simulation gives you the Strait of Hormuz. But the discipline that comes from serious crisis governance work gives you something better than a script. It gives you a board that can actually govern when things go sideways. That is rarer than it should be, and worth every hour of the preparation.
Tim Glowa is a Calgary-based management consultant and Doctor of Business Administration student at the Haskayne School of Business, University of Calgary. He leads HRbrain.ai and is the author of "Smart Board Governance for the AI Revolution".
Sources
1. Krause, R., Withers, M. C., and Waller, M. J. (2024). Leading the Board in a Crisis: Strategy and Performance Implications of Board Chair Directive Leadership. Journal of Management, 50(2), 654-684. https://journals.sagepub.com/doi/abs/10.1177/01492063221121584
2. van Essen, M., Engelen, P., and Carney, M. (2013). Does Good Corporate Governance Help in a Crisis? The Impact of Country- and Firm-Level Governance Mechanisms in the European Financial Crisis. Corporate Governance: An International Review, 21(3), 201-224. https://onlinelibrary.wiley.com/doi/abs/10.1111/corg.12010
3. Mukherjee, S., and Krammer, S. M. S. (2024). When the going gets tough: Board gender diversity in the wake of a major crisis. The Leadership Quarterly, 35, 101784. https://doi.org/10.1016/j.leaqua.2024.101784
4. McMullin, C., and Raggo, P. (2020). Leadership and Governance in Times of Crisis: A Balancing Act for Nonprofit Boards. Nonprofit and Voluntary Sector Quarterly, 49(6), 1182-1190. https://journals.sagepub.com/doi/10.1177/0899764020964582
5. Von Post, R., and Pozen, R. (2020). Boards Can Guide Businesses Through a Crisis. MIT Sloan Management Review. https://sloanreview.mit.edu/article/boards-can-guide-businesses-through-a-crisis/
6. Harvard Business Review (2020). Executives and Boards, Avoid These Missteps in a Crisis. https://hbr.org/2020/04/executives-and-boards-avoid-these-missteps-in-a-crisis
7. McKinsey & Company. The Russia-Ukraine crisis: Twelve global disruptions. https://www.mckinsey.com/capabilities/strategy-and-corporate-finance/our-insights/war-in-ukraine-twelve-disruptions-changing-the-world
8. UNCTAD (April 2026). Hormuz Disruption Deepens Global Economic Strain Across Trade, Prices and Finance. UN Trade and Development rapid assessment. https://unctad.org/news/hormuz-disruption-deepens-global-economic-strain-across-trade-prices-and-finance