Signals ignored: the UK Post Office scandal and the cost of governance silence

At our 14 March 2025 webinar with UK Institute of Director, Director of Policy and Corporate Governance, Dr Roger Barker, on the Post Office Horizon scandal, we ran out of time to respond to the flood of thoughtful, challenging questions from directors. In this article we revisit those questions and reflect on what they tell us about board oversight – particularly when trust in management, technology and culture is misplaced.

The Post Office scandal wasn’t simply a systems failure. It was a 20-year breakdown of accountability, critical thinking and ethical governance. And while the flawed Horizon IT system was the trigger, the root causes were deeper: board passivity, groupthink and a leadership culture where bad news struggled to surface. 

One question asked whether Horizon IT system’s failures were systemic, since not every branch (and associated sub-postmaster was affected. That’s precisely what made the errors harder to detect. Inconsistent impacts gave the illusion of localised problems and reinforced assumptions that issues lay with individual operators – not the system itself. This variability should have raised red flags. It didn’t. 

Many directors worldwide have questioned how a board could remain so passive for so long. One webinar attendee asked whether the traditional model of a board “staying high level to avoid undermining management” created a single point of failure in the CEO. This seems clear. Issues with the Horizon IT system exposed what happens when a board defers too heavily to executives and fails to triangulate information. This is reminiscent of issues that arose at Qantas as reported in “The Chairman's Lounge" book.  Boards must stay out of operations – but that doesn’t mean staying out of the loop. Oversight is not observation from a distance; it is active, informed and sceptical.

This is where digital literacy matters. Several questions asked what kind of training non-technical directors need. It’s not about mastering code or systems design. It’s about being able to ask the right questions: “What’s the evidence this system works as claimed?”, “How are anomalies escalated?”, “Are whistleblowers listened to or marginalised?” Directors must be digitally curious, not digitally fluent. 

Some questioned whether this failure was rooted in a lack of IT knowledge – or something more fundamental, such as a failure of critical thinking. That seems to be the right diagnosis. The board didn’t lack data – they lacked the will to question it. They accepted assurances over evidence. They confused being informed with being wise. 

On the issue of accountability, many asked whether directors were ever held personally liable or whether insurance covered their omissions. The answer is uncomfortable: there were no prosecutions (at least not so far while the Inquiry is still preparing its report), and D&O insurance likely protected individuals from financial consequences. But governance isn’t just about legal thresholds. It’s about stewardship. Boards should feel the weight of what went wrong, regardless of whether they are sued. 
 
There were also questions about culture. Where did the distrust originate? Did it have a class dynamic? It may have done. But the larger point is that culture becomes corrosive when it punishes dissent. Directors asked whether any board members resigned in protest. As far as is currently known, none did. That silence should worry us all.

Boards need to foster conditions where constructive dissent is possible. One question reflected on healthcare boards, where management can reframe issues to downplay risk. That concern applies across sectors. Boards must create safe, structured ways to hear frontline voices – whether through site visits, protected channels or stakeholder forums. 

Another question noted both chairs – Alice Perkins and Tim Parker – were tasked with improving financial performance and had limited capacity for deeper oversight. This again highlights the need for clarity of purpose. When governance focuses solely on performance, it risks losing sight of ethics, resilience and long-term impact. This is a lesson for all boards to take a systemic and strategic approach to governance. 

Several webinar participants raised the issue of stakeholder representation on boards. Would things have been different if union or employee voices had been present? That’s a fair challenge. Diversity in board composition – of thought, background and lived experience – can break the cycle of groupthink. So too can stronger risk and audit functions. Questions were raised about whether such committees existed. They did but they were not effective. Success UK Post Office Boards treated risk as a box to be ticked, not a strategic threat to be interrogated. 

Finally, the question many people asked: could this happen in New Zealand? The instinctive answer is no. We pride ourselves on being small, connected and transparent. But these very strengths can become weaknesses. Social familiarity can create blind spots. And history shows that even in New Zealand, institutions have failed in ways that echo what we saw in the UK. 

The Post Office scandal is not just a British story. It is a warning to every board that culture, systems and ethics must be governed – not assumed.  The unanswered questions from this webinar show directors are willing to reflect deeply. Board reviews using IoD “Evaluate” and Evaluation Guide board evaluation tools can help to address issues like this and uncover issues that would otherwise go unaddressed.  The challenge now is to act on these lessons to show the sort of learning that clearly did not occur with the successive boards and directors at the UK Post Office!