When governance cannot decide for you

Perhaps a part of the quality of governance is measured precisely in the ability to recognise when the system has finished its work and judgment must begin its own.

In July 2026, the Japanese Financial Services Agency and the Tokyo Stock Exchange published the new revision of the Corporate Governance Code.

Within a document dedicated to corporate governance, a formulation appears that deserves attention: corporate governance is defined as a structure capable of supporting transparent, fair, timely and decisive decisions, taking into account the perspectives of shareholders, customers, employees and local communities.

The word that interests me is decisive. Because it shifts the focus.

Governance is about rules, responsibilities, supervision, transparency and control. In the Japanese Code, it is also about the conditions within which management exercises its decision-making capacity.

The 2026 revision makes this passage particularly evident. The documents accompanying its introduction speak of growth-oriented governance, value creation, appropriate risk-taking and business judgment in the allocation of resources.

Within the same architecture, governance, accountability, risk-taking, judgment and decision-making coexist.

It is an interesting combination, especially when governance is predominantly thought of as the system that protects the organisation from wrong decisions.

Protecting the decision

An important decision is surrounded by mechanisms that perform precise functions: procedures, delegations, controls, data, opinions, authorisation levels.

They make constraints visible, distribute responsibilities, introduce checks and allow for the reconstruction of the process through which a choice was made.

They protect the decision.

Then comes a different point.

Two alternatives can both be legitimate. Two scenarios can be supported by credible data. Waiting can have a cost and acting can expose one to a risk. The available information can be sufficient to understand the problem and insufficient to guarantee the result.

At that point, the system has prepared the decision.

Someone must exercise judgment.

The Japanese revision traces resource allocation back to the business judgment of the company and assigns the board the task of defining the general direction of the strategy, creating an environment favourable to appropriate risk-taking by management and exercising effective supervision.

Governance thus builds a field within which the decision can be exercised responsibly.

The boundary

The point becomes more delicate when the protection and substitution of the decision begin to converge.

Another piece of data can reduce a part of the uncertainty. A new opinion can make a consequence visible. A further authorisation step can protect a relevant interest.

The question is what that step will actually make more decidable.

Here I see an important distinction in executive work: protecting the decision and transferring the weight of the choice to the process are two different operations.

The first builds the conditions to decide.

The second can progressively transform the process into the place where the responsibility for the choice is deposited.

From within the organisation, the phenomenon can be difficult to see. The process works, documents are produced, people are consulted, formal steps are respected.

And the decision continues to move.

From management to the board.

From the board to a committee.

From the committee to an advisor.

From the advisor to new data.

From data to a new analysis.

At that point, it becomes relevant to observe the real structure of the decision: who possesses the right to choose, who exercises influence, where the information that guides the choice is found, and who will bear the consequence.

Decision rights and accountability become elements of the field.

Judgment and accountability

Judgment acquires meaning precisely where the answer is no longer evident.

It requires information, experience and the ability to read consequences and constraints. It comes into play when someone must attribute a weight to what they see and choose between alternatives that retain a degree of uncertainty.

Risk belongs to this space. Governance can make it readable, establish acceptable levels, build safeguards and define criteria. Judgment attributes a weight to what remains.

My reading is this:

Good governance defines the point at which judgment must be exercised.

And that is where accountability acquires concreteness.

In a complex decision, who produces the analysis, who influences the choice, who possesses the decision right and who will live its consequences can be different parties.

The final signature tells only a part of this structure.

Accountability concerns the actual relationship between authority, choice and consequence.

Artificial intelligence changes the field

Artificial intelligence makes this boundary even more interesting.

A system can retain information, compare scenarios, detect patterns, retrieve precedents, produce summaries and formulate recommendations. Decision support can grow enormously.

The quality of the support, however, changes the field of the decision.

A recommendation built on an amount of information greater than that processable by a person inevitably acquires its own weight. It directs attention, changes the perception of alternatives and can also change the authority attributed to the recommendation itself.

The decision right can remain formally human while the substantial structure of the decision changes.

For this reason, the question becomes more precise: where does support end and where does the right to decide begin?

The more powerful the support system becomes, the more readable the distribution of responsibility must become.

Reading the field of the decision

This is where I place Field Reading.

Field Reading, in my work, concerns the ability to observe the real conditions within which a decision takes shape.

The formal role is one of these conditions. Alongside it exist recognised authority, access to information, influence, interests, consequences and the concrete possibility of exercising one's decision rights.

A decision can be perfectly described in the organisation chart and appear very different by observing the field in which it occurs.

The opinion that actually changes the direction can belong to the one who formally decides or be found elsewhere. The decisive information can arrive before the decision-making table. The authority necessary to make a choice practicable can be distributed differently from what is foreseen on paper.

Here judgment acquires depth.

Because exercising it also means understanding the field on which the choice will produce effects.

Substance over form

In the 2026 revision, another significant expression appears: substance over form.

The Financial Services Agency and the Tokyo Stock Exchange recall the spirit of a principles-based approach and a substantial implementation, linked to the specific situation of the company.

Form makes the process traceable.

Substance allows one to see what is really happening.

Keeping both together means creating more mature conditions for the exercise of judgment.

When the system has done its job

A decision can be prepared very well.

Information is available. Risks have been analysed. Responsibilities are defined. The appropriate people have been involved. Alternatives are readable.

A choice remains.

That residual space can appear as something to be filled with another piece of information, another model, another authorisation.

It can also indicate that the system has done its job.

It has brought the decision to the point where it can be exercised.

Continuing to improve the system, from that moment on, can increase the distance between the decision-maker and a choice that remains theirs anyway.

This is where judgment begins.

And along with judgment comes accountability.

Perhaps a part of the quality of governance is measured precisely in the ability to recognise when the system has finished its work and judgment must begin its own.