During the Covid crisis, I observed a clear divide among Startups where I was involved as an Investor and Board Director. Some collapsed within weeks, some survived the initial shock but failed within the two years that followed, while others adapted and survived. The difference was not the shock itself, but the Governance maturity in place beforehand. Boards focused on standard risk mitigation, but froze when faced with extreme scenarios, liquidity stress and urgent decisions. Those that had anticipated disruption, built trust and clarified crisis decision- making moved fast. This story shows how crises do not create Governance failures, they reveal them. Interview with Diane Tea, Co-Chair of the ILA Startup & Scaleup Committee.
You observed companies collapse within weeks versus others that survived and adapted. What was the most striking governance difference you observed between those two categories — and was it something you had noticed before the crisis hit?
The most striking difference was not sector, funding, or business model. It was the maturity of the Board itself. Long before Covid, it was often possible to identify which companies would be better equipped to navigate major disruptions.
The first differentiator was engagement. Some Board Directors felt genuine ownership and responsibility for the company’s success and survival, while others viewed their role as periodic oversight.
Experience also mattered. Board Directors exposed to complex environments and business continuity planning were generally better prepared to navigate uncertainty.
Startups cannot choose their crises, but Founders often can influence who sits around the Board table.
Where power dynamics allowed it, I pushed Boards to identify key risks, mitigation plans, and challenge assumptions. We could not predict Covid, but asking “what if?” builds resilience. Covid did not create these differences. It revealed them.
Boards focused on standard risk mitigation but froze under extreme scenarios. What does “anticipating disruption” actually require in practice — and is it realistic to expect that of most startup boards?
Nobody could realistically anticipate a pandemic such as Covid. The actual real question is whether a company’s governance system can continue to function when assumptions suddenly become invalid.
In my experience, many Founders and Board Directors underestimate the value of risk management and mitigation planning until a crisis occurs. I often had to push for these discussions because they compete with immediate priorities such as growth, fundraising, customers, and product development.
Yet these exercises are particularly important for Startups. Large corporations often have greater financial reserves, diversified revenue streams, and organisational buffers. Startups rarely enjoy those advantages. A single disruption affecting liquidity, customers, suppliers, funding, or key individuals can threaten the company’s survival.
Boards that had developed the discipline of identifying risks, mitigation plans, and challenging assumptions adapted much faster. The objective is not to predict every crisis, but to build organisational resilience before it is needed.
You write that crises don’t create governance failures — they reveal them. Can you describe a specific moment in one of those boardrooms where that revelation became undeniable?
The revelation usually emerged when difficult decisions could no longer be postponed. Across several situations, I observed Boards and Leadership Teams confronted with cost reductions, strategic pivots, hiring freezes, or changes to growth plans. In some cases, neither Founders nor Boards were willing to let go of assumptions that no longer matched reality.
What made the governance weakness undeniable was the inability to move from endless discussions to taking ownership of difficult decisions. Meeting after meeting, decisions were postponed despite clear warning signs.
As a Board Director, I am conscious of the collective legal liability we all carry. In one particular situation, I ultimately chose to resign because remaining part of a Board that is unwilling or unable to act had itself become a real governance risk.
Trust between board members and management is cited as a key enabler of fast crisis response. How do you build that trust in advance — and can it be built quickly when a crisis is already unfolding?
Trust is not built during a crisis. It is built beforehand through transparency, open dialogue, constructive challenge, and a culture of no surprises. A crisis simply tests the quality of the trust that already exists.
Without trust, governance quickly breaks down. Founders may start withholding information because they fear exposing mistakes, weaknesses, or their inability to manage the consequences of the crisis. Once this happens, Boards lose visibility precisely when they need it most.
I witnessed this in one Startup in which I was an Investor. The company did not survive Covid. Could the bankruptcy have been prevented? I cannot say. But had trust and transparency remained intact between Management and the Board, we might have identified options earlier and reacted differently. By the time the Board had full visibility, many options had already disappeared.
Founders should not view their Board as an adversary. A good Board is a partner with the same objective: helping the company succeed and survive.
What governance changes did you recommend or implement after the Covid period — and which ones actually stuck beyond the immediate emergency?
After Covid, I became even more vocal about the need for Boards to view resilience not only through the lens of risk management, but as a broader governance responsibility.
I advocated for closer liquidity monitoring, scenario planning, crisis escalation mechanisms, and a more rigorous assessment of concentration risks, whether linked to customers, suppliers, funding sources, or key individuals.
More importantly, I encouraged Boards to challenge assumptions more actively.
Many Startups devote enormous attention to growth scenarios but very little to survival scenarios. Covid reinforced my belief that governance is not only about helping companies grow. It is also about ensuring they remain capable of functioning when growth suddenly stops.
As memories faded and growth returned, some Boards reverted to old habits. The strongest ones institutionalised these lessons and embedded resilience into their governance model rather than treating it as a temporary response to an exceptional event.
Editor’s note: As part of the collaboration between Silicon Luxembourg and ILA, members of the ILA Startup and Scaleup Committee are sharing their stories on governance. These reflect their personal views only and do not necessarily represent the official position of ILA.
