Governance and Risk Management Failures at the Highest Levels in Society and its Impact on Daily Lives

India plunged into darkness due to the massive blackout in July due to a grid failure. The failure of the Northern, Eastern and North-Eastern grids forced more than 600 million people to be without electricity for hours. The largest single blackout in history of mankind.

Many people ask is Governance and Risk management important for day to day life?  Can these principles affect a person at the end of the day? The answer is absolutely yes and over a period of time the impact of poor Governance multiples like compounding interest in a major adverse event.  The reason behind this was nothing but a combination of poor governance and technology. Not only was this episode a wake-up call for India but it was also a wake-up call for the other countries to keep a check on their increasingly complicated technical and ageing power grids. This incident was a result of policy paralysis in India’s power sector apart from being a management failure.

According to two professors at Harvard Business School, the blackout in India exposed the government’s inability to respond and solve its massive infrastructure deficit. They say, India faces reputation risk with companies now considering the consequences of investing in the country.

Amidst the falling economy and endless scams, the last thing the government of India needed was a major blackout and their inability to improve the conditions. It raised serious questions about India’s capacity to meet the energy demands of its growing population.

In the same week that these events happened the Indian Power Minister under whose watch this massive blackout happened, got promoted to be Home Minister of India.  One can only wish him better luck with securing world’s largest democracy.  Was the darkness able to hide India’s political and Governance dysfunctions? Apparently not.









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