Boardrooms must not be caught dozing over risks: The IndiGo fiasco ought to splash them awake

True, boards do not run a business’s daily operations. But, in the case of IndiGo, the board’s role mustn’t escape scrutiny. New safety regulations had been notified well in advance. Staffing implications were evident. Software changes were scheduled events. Seasonal congestion was predictable.

These were not random events that collided, but known pressures that converged. Boards exist to examine precisely this kind of convergence risk. Their mandate goes beyond reviewing earnings or expansion plans. It includes testing whether the firm’s management has built operational depth, surplus capacity and crisis-readiness.

IndiGo’s experience raises fundamental questions. Was staffing resilience examined once it was clear that safety norms would tighten? Were contingency protocols assessed before large-scale IT deployment? Were communication systems stress-tested? Did the company’s directors receive regular, unfiltered indicators of operational fragility? If they did, did they press the management into urgency mode?

The airline’s breakdown in communication with passengers during its worst phases of flight disruption also suggests an absence of oversight. Airline systems displayed operational status that diverged from airport data. Information integrity in this modern age of over-communication has become vital, a hygiene factor. Boards that treat it as a branding detail miss its economic and reputational consequences.

The organization’s front-line staff carried the visible cost of deeper weaknesses. These employees became the public face of decisions they did not take and failures they did not design. Boards exist to prevent burdens from cascading downward when problems originate much higher up.

One assumes that institutional investors and analysts who track this scrip would ask tougher questions of the management. But these are questions the board itself should have asked long before these disruptions occurred.

Was workforce depth reviewed by the Nomination and Remuneration Committee ahead of the revised duty-time rules? Was staffing presented to the board as an operational risk rather than a human-resource variable? Did the Risk or Audit Committee receive regular indicators on crew utilization and schedule fragility? Were system-wide software deployments examined for operational impact at the board level? Were customer-facing information systems stress-tested for failure scenarios and peak-load conditions?

And did the board evaluate business continuity with the same seriousness as fleet expansion? Or were risks informally discounted on the assumption that promoter influence, regulatory access and the use of political capital would keep operations going smoothly?

In India, corporate scrutiny often stops at the CEO’s office. In promoter-led enterprises, it often stops earlier. In such structures, the management rarely has full strategic authority and independent directors have less of a say anyway. Boards may exist in form, but their role in shaping risk mitigation plans, questioning operational design and preventing an over-concentration of power is limited.

In more mature markets, failures of this scale typically result in sustained board-level examination. In India, attention tends to dissipate once operations stabilize and headlines move on. That reflex has consequences. It converts disruption into an episode rather than an institutional lesson and allows governance weaknesses to persist.

Sectoral concentration magnifies responsibility. A business with a market share larger than all other players combined in an important sector must play a different role in society than a regular firm. Continuity, transparency and risk containment become public obligations.

What unfolded at IndiGo should trigger institutional consequences. Boards must begin to assess resilience with the same seriousness as they assess growth. Apologies do not suffice.

Airline boards routinely monitor exposure to fuel price volatility and foreign-exchange risk arising from dollar-denominated leases and maintenance contracts. More active directors would insist on stress-testing supply chains for aircraft parts and engines, cybersecurity vulnerabilities in operational systems and dependence on outsourced ground services. Weather volatility, airspace restrictions, geopolitical flux, airport capacity constraints and regulatory changes must also be treated as top-order risks.

Of course, regulators also carry a share of responsibility. Aviation regulation has long been oriented towards aircraft safety and price competition, but appears not to cover organisational strength. The IndiGo episode offers a lesson: organizations that operate public utilities, like airports, ports and expressways, must be governed as such. How well they are managed matters to more than just shareholders.

The author is a corporate advisor and author of ‘Family and Dhanda’. X : @ssmumbai