Governing innovation: enabling disruption without losing control

IN THIS modern era of unrelenting disruption, boards are increasingly required to go beyond merely overseeing performance. They must also enable innovation. Technologies like generative AI, ESG-linked investment models, and platform-based business strategies are reshaping industries. These changes demand not only operational adjustments but also bold strategic reinvention. Yet many boards are grappling with how to respond to innovation strategically, without compromising their core governance responsibilities. This uncharted terrain is testing the resolve of modern boards.

- NQOBANI MZIZI

Traditional governance models were built for stability, predictability and control. Innovation, in contrast, is uncertain, iterative, and nonlinear. It often involves experimentation, ambiguity, and sometimes failure.

For boards used to structured reports, clear metrics, and linear plans, this unpredictability can seem risky. Yet paradoxically, resisting innovation presents a greater threat than any of those listed on the strategic or operational risk registers.

As digital disruption and societal shifts accelerate, the board’s ability to cultivate innovation has become essential to long-term value creation.

A common governance blind spot is to relegate innovation to a management function, with limited strategic involvement from the board. The assumption that management is inherently more equipped to drive innovation can be detrimental. This gap may stem from a lack of technological fluency, unclear mandates or discomfort with the intangible nature of innovation.

The result is often a lag: boards are briefed on innovations after the fact, rather than helping to shape direction, assess risk appetite or define success.

This reactive posture creates a widening governance gap, one that threatens not only agility but long-term relevance.

The 2023 McKinsey Global Board Survey reveals a troubling paradox: while 87% of directors cite innovation as a top three priority, fewer than 20% believe their board governs it effectively.

This is more than a governance failure; it signals a countdown to organisational irrelevance. Boards must now reconsider what it truly means to govern innovation.

Governing innovation does not mean micromanaging trial and discovery. Instead, it means creating the conditions under which innovation can thrive ethically, strategically and responsibly.