Why Companies Fail

Every major corporate scandal follows a familiar script. A company fails; lives are damaged, fortunes are lost, and the hunt for culprits begins. The media demands accountability. Politicians promise reform. Regulators write new rules. Yet, despite decades of inquiries, reports and governance reforms, the same patterns of failure keep recurring.What if these explanations are missing the real story? Why do intelligent, experienced leaders and boards sometimes lead themselves towards disaster? Drawing on 27 major corporate failures spanning more than three centuries - from the South Sea Bubble and Barings Bank to Northern Rock, Carillion, the Post Office Horizon scandal and FTX - this book reveals the hidden human dynamics that contribute to corporate collapse. It shows how capable people make flawed decisions, how boardrooms become vulnerable to collective blind spots, and how organisations gradually normalise behaviours that, in hindsight, seem obviously dangerous.The authors argue that corporate failures are not caused by a few bad individuals. They emerge from entirely human processes: the way people interpret information, respond to pressure, build relationships, create norms and make decisions together. Over time, these forces can impair judgement, suppress challenge and gradually normalise behaviours that increase risk and weaken organisational resilience.Written by Simon Laffin, an experienced chairman and City veteran, and Stephen Jarvis, a psychologist specialising in human factors and aviation safety, Why Companies Fail blends compelling case studies with insights from psychology, human factors and organisational research. The result is a practical and thought-provoking guide for directors, executives, regulators, commentators and investors who want to move beyond blame, recognise the conditions that allow failure to develop, and build more effective boards and more resilient organisations.