This Halloween we examine two of the greatest horror movies of all time to see how good practice governance could have helped to mitigate some of the worst fictional corporate disasters, as a bit of fun! While the examples are all fictional, there are certainly real-world lessons to be applied to these cases.
For a film about a man-eating cloned-dinosaur theme park, Jurassic Park makes a very good case study for risk management in companies. Underpinning the plot is the idea of chaos theory, which posits that small risks can unexpectedly snowball into disasters. The entire reason the main characters even visit the titular park is as part of a risk management exercise mandated by the insurers of and investors in Jurassic Park. Once the initial spectacle of seeing live dinosaurs wears off, the film offers a rather nuanced look at how seemingly small issues within a company can be overlooked and spiral out of control.
Early in the film, the chief engineer, Ray Arnold (played by Samuel L. Jackson) points out that the park has numerous minor technical issues from car doors that cannot lock to systems that are inexplicably tied together such as the electric fences and the phone lines. However, all these issues are brushed off by the CEO, John Hammond with the iconic line “we spared no expense”. In attempts to automate as much of the park as possible, the CEO is running the entire operation on a skeleton crew, all of whom are burnt out from constantly putting out small fires.
While the actual downfall of the park was the intentional sabotage of its systems through corporate espionage, the inevitability of disaster resulting from various underlying flaws was mentioned frequently throughout the film. Most of these issues come from what is perhaps the biggest failure of governance at Jurassic Park – the utter detachment of the CEO from any sort of wider accountability and oversight. Hammond runs the company in a highly authoritarian manner, dismissing the concerns of his colleagues while hiding away from other senior stakeholders on his private island. Perhaps if there had been other members of the board more closely attached to the project, more of these issues would have been identified and challenged? We cover this topic in much more detail in an episode of the Discover Governance podcast.
Real world parallels can be seen between the approach to risk in Jurassic Park and that seen in many tech startups which operate under the ‘move fast and break things’ ethos. The film perfectly counters this viewpoint when Jeff Goldblum’s, Dr. Ian Malcolm says: “Yeah, but your scientists were so preoccupied with whether or not they could, they didn't stop to think if they should.”
- Small institutional issues can accumulate and spiral into wider disasters; risk management must look beyond the obvious. You can read more about this in our Terms of reference for the risk committee guidance.
- A lack of oversight can result in poor decision-making from senior leadership.
While certainly an extreme example, Weyland-Yutani, the utterly ruthless mega-corporation in the Alien franchise, is in some ways more terrifying than the xenomorph it covets so much. The company provides an excellent case study for the importance of governance. It is a company whose culture places profit above anything else, even human lives. One can see this in the character of Burke in the sequel Aliens. Entirely motivated by his executive bonus, Burke’s endeavours to try and capture a deadly predatory species lead to a colossal loss of life for an entire planetary population.
There are many cases in the real world of executive remuneration being tied exclusively to short-term profits, and that can lead to disaster. Bonuses should be related not only to profits, but also healthy growth that can be achieved in a sustainable manner. Removing the moral implications of solely profit-based executive remuneration, from a strategic perspective a profit-focused approach can lead to short-term thinking, as long-term goals are not being incentivised. Nowadays, more purpose-driven organisations tend to be better served through reinforcing a company culture that rewards doing the right thing, taking into consideration ESG frameworks.
Furthermore, Aliens can be used as a case study for the poor handling of whistleblowers. At the beginning of the film, the main character Ellen Ripley (Sigourney Weaver) is challenged for her destruction of company property during her attempt to escape the titular Alien in the first movie. The committee which interviews her is utterly unconvinced of her claims that the company was engaging in unethical behaviour. Far from giving her a genuine hearing, the panel acts as though Ripley’s guilt is a foregone conclusion. The committee was also made up of solely Weyland-Yutani leadership and other individuals with a strong conflict of interest, further weighting the decisions against the whistleblower. Of course, while the case in the film is an extreme example, it does serve to highlight how the mistreatment of whistleblowers can contribute to corporate failure.
- Consider carefully the metrics to which executive remuneration is tied, you can find out more in our Terms of reference for the remuneration committee.
- Foster a culture that prioritises strong ethical standards alongside profit.
While it is highly unlikely that your organisation is aiming to create a dinosaur theme park or weaponise a hostile alien, it is still interesting to see how even Hollywood can show how a lack of good practice governance can result in horror.