Corporate India may be facing a risk that is easy to overlook: obsolete thinking. An Independent Director Richa Arora has argued that while technology, artificial intelligence, climate shifts and geopolitical shocks are changing businesses, corporate governance practices often continue to rely on old assumptions and frameworks.
The risks are changing, but thinking may not be
Arora raised the issue in a LinkedIn post while looking at how Indian corporate boards approach emerging risks. She pointed to a recurring gap between what boards ideally need to do and what happens in practice. The risks themselves are familiar, but their impact and form are changing constantly.
Technology is disrupting established business models. AI is changing industries, jobs and roles. Climate shifts and geopolitical shocks are also creating new areas of vulnerability for businesses. The challenge, according to Arora, is that the way companies respond to these risks may not always evolve at the same pace.
Why yesterday’s frameworks may not work tomorrow
She said that the businesses can no longer assume that risks will look the same as they did in the past. A risk that once appeared distant or unlikely can take a different shape as technology, markets and global conditions change.
Arora said boards need to look beyond established assumptions and question whether legacy models still make sense in a rapidly changing business environment.
That means governance can’t simply rely on frameworks that worked earlier. Boards also need to examine whether their existing approach is prepared for risks that are still taking shape.
Boards need to challenge old assumptions
