Case Study: When the Board Debates KPIs but Ignores Risks

I once worked with a trade association whose Board displayed a striking imbalance in its governance. During a strategy session, I asked the directors what major risks they saw facing the organisation over the next three years. Silence. A few awkward glances, some nervous smiles, but no substantive answers. The question hung in the air like a cloud.

Later that same meeting, we turned to a proposed set of KPIs. Suddenly, the atmosphere transformed. The directors came alive, leaning forward, debating wording, questioning decimal points, arguing passionately about whether a target should be 12% or 15%.

On the surface, that energy looked like healthy engagement but in practice, it revealed the Board’s real comfort zones, governance imbalance, and misplaced priorities.

Comfort Zones: Numbers Feel Safe

For this Board, risk was uncomfortable. It meant grappling with uncertainty, reputational exposure, and possible failure. Nobody wanted to appear negative or admit gaps in their understanding.

KPIs, on the other hand, felt safe. They were neat, numeric, and precise. Directors could demonstrate their contribution by challenging the detail. The problem? They were engaged in the wrong place, i.e., measuring the work rather than safeguarding the organisation’s future.

Governance Imbalance: Nose In, Fingers Out

The association’s executives often complained of “boardroom micromanagement.” And I could see why. The directors were diving deep into operational detail. Instead of steering the ship, they were rowing it; and this is a common trap. Many association boards include directors with strong technical expertise. That expertise is valuable, but if it isn’t channelled properly, it manifests as management behaviour in the boardroom. The effect: duplication of effort, frustrated staff, and no one paying attention to the icebergs ahead.

Signals of Priorities: What Gets Attention Gets Done

The most revealing element of all was where the directors invested their energy. They gave silence to risk but hours of debate to KPIs. That sent a loud message: measurement mattered more to them than foresight. And culture spreads. Executives quickly learn what the Board values. If the Board sweats the small numbers but avoids the big picture, the whole organisation drifts into compliance mode rather than leadership mode.

Why It Happened

In my diagnostic conversations, a few reasons became clear:

• The directors found risk discussions “woolly” without structure.

• They feared sounding negative or uninformed in front of peers.

• They had inherited a culture of diving into operational detail.

• KPIs gave them a neat way of demonstrating accountability.

None of this made them bad directors. It just meant they needed support to realign their role.

What We Did About It

Working with the Chair and CEO, we introduced a few practical changes:

1. Re-anchored the Board’s role We held a short session on directors’ duties, stressing that risk oversight isn’t optional but central to their fiduciary responsibility.

2. Shifted the agenda balance Risk and strategy discussions were moved to the top of the agenda. Performance reports followed. That small change meant attention was highest where it mattered most.

3. Introduced a risk framework Instead of a blank question about risks, we categorised them: financial, reputational, regulatory, strategic. This gave directors a ladder to climb.

4. Used scenario prompts Rather than asking “what risks do we face?”, I posed scenarios: “What if a regulator questioned our standards? What’s our response?” That turned abstract risk into a concrete discussion.

5. Clarified ownership We drew a clear line: KPIs belong to management, risk belongs to the Board. Directors add most value by challenging assumptions, not quibbling decimals.

The Outcome

Within a year, the Board’s conversations shifted. KPI debates still happened, but they were briefer and more proportionate. Risk was no longer met with silence. Directors began identifying external threats, challenging management’s assumptions, and agreeing a clear risk appetite.

Most importantly, the executives reported that the Board felt less like a second layer of management and more like a genuine partner in strategy and oversight.

Lessons for Other Boards

This case isn’t unique. Many trade association boards find themselves in the same pattern: engaged, but in the wrong place. The energy they invest in measurement is admirable, but if it comes at the expense of foresight, the organisation is left exposed.

The key lesson is simple: Boards that only measure are auditors; boards that lead engage with risk.

So if your Board goes quiet when asked about risks but lights up over KPIs, take it as a red flag. Don’t mistake noise for effectiveness. Recognise it for what it is: a Board confusing measuring with leading.