Academia de Guvernanță. Risk, Strategy & the Human Factor: What Drives Sound Decision-Making in Modern Boards
As corporate governance evolves to address increasingly complex risks, both personal traits and organizational tools shape the way board members make decisions. In a recent episode of Academia de Guvernanță on PROFIT NEWS TV, Simona Constantinescu, CEO of ANA Hotels Romania and President of FIHR, and Carmen Micu, CEO and Founder of Envisia – Boards of Elite, discussed the psychology of risk, the importance of board alignment with business strategy, and the tools that enable responsible, evidence-based decision-making at the top.
Risk Appetite Starts with the Individual
"Running a company—or any organization—means accepting risk," says Simona Constantinescu. Every decision-maker will inevitably face it. That’s why risk analysis has become crucial, both from an organizational and personal perspective.
“Risk appetite is an individual trait. It reflects one’s willingness and ability to take on risk while serving on a board, in order to achieve specific goals in a specific context. Context shifts the type and visibility of risk,” she explains.
Rational Boards, Emotional People
Carmen Micu adds that, psychologically, individuals are more or less inclined to accept risk based on prior exposure, professional background, and even early-life experiences.
“In a boardroom, decisions are ideally rational—but in practice, our personal risk tolerance always plays a role. It’s shaped by everything from values inherited in childhood to executive experience and professional conditioning,” she notes.
This is why a well-structured board must rely not on instinct, but on well-informed analysis.
Decisions Must Be Grounded in Risk Reports
“In any board, decisions must be based on risk assessments and feasibility studies that consider all possible vulnerabilities—from PESTLE to Porter’s Five Forces,” says Carmen Micu. “Boards need this information in front of them for every strategic decision.”
Constantinescu reinforces this: risk appetite is not just a number—it is qualitative and linked to a person’s fears and sense of responsibility.
“Board members carry the fear of causing irreversible harm—layoffs, business failure—through poor decisions. The more experienced a member is, the more likely they are to think in scenarios and long-term impact,” she says.
Personal vs Institutional Risk Capacity
Personal risk behavior is influenced by integrity, ego, fear, and perception. But good governance also depends on the institutional support board members receive.
“It’s the board’s duty—not just of the chair, but all members—to challenge management, request additional reports, bring in external experts when needed, and even vote against proposals if information is insufficient,” says Constantinescu.
“Board composition must align with the company’s strategy and lifecycle. Members need to understand where the business is in its evolution.”
The Tools Boards Need for Risk-Informed Governance
Boards need permanent access to an updated risk matrix—covering macro, micro, and internal threats, says Carmen Micu. Other key tools include:
- A dedicated Risk Committee, especially within strong governance structures;
- Board intelligence platforms, hosting strategic documents and decision-making resources;
- Scenario generation processes, ideally conducted every two years, to help boards prepare for future crises or disruptions.
“These instruments are essential to mitigate risk, ensure preparedness, and foster a proactive, not reactive, governance culture,” she notes.
About Envisia – Boards of Elite
Envisia is the first business school in Central and Eastern Europe dedicated to board education. It provides state-of-the-art training, mentoring, and advisory services for board members, C-suite executives, and senior professionals, in partnership with top academic and regulatory institutions.
Its offerings include:
- The Master of Arts in Board Practice and Directorship (with Henley Business School, UK) – the first postgraduate program in Romania with triple international accreditation. About the program here.
- The Corporate Governance that Creates Value program – Romania’s only postgraduate program for listed company board members. About the program here.
- Short courses, board-readiness assessments, international certifications, and strategic governance advisory.
Envisia’s partners include Henley Business School, London Stock Exchange / Refinitiv, CISI UK, European University Cyprus, IASE, and AIR. National partners include AMEPIP, BVB, AAFBR, AAF, ARIR, AAI, APAPR, UNSAR, and others. Learn more about Envisia here.
Read more about the discussion and the interview here.
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