Years ago, I sat across from the founder of a promising scale-up. Charismatic, sharp-witted, and visibly proud of his instinct. “I don’t need risk reports,” he said with a grin. “My gut tells me what’s right.” He had just closed a seven-figure acquisition over the weekend, based on a single phone call and a LinkedIn profile. “Governance slows things down,” he added, winking. “And speed is everything.”

Nine months later, the company he had acquired filed for insolvency. He blamed the market. The team. The supplier. The war. The weather. He blamed everyone, except the decision-making process. His gut had failed him. But worse than that, he had no model in place to catch the failure. No structure. No net. Just a story, and a gut that didn’t deliver.

This article is for him. And for all of us who, at one point or another, believed the same lie.

The Romantic Lie of Instinct

Entrepreneurship has its own mythology. The garage. The pitch deck. The moment of insight. And at the center of it all, the hero: the founder whose gut always knows.

From Steve Jobs to your cousin’s Shopify store, we’ve romanticized instinct. We’ve turned “I feel it” into a virtue. It’s fast. It’s seductive. It strokes the ego and feeds the legend.

But here’s the uncomfortable truth I’ve learned the hard way:

Instinct is not a system. It doesn’t scale. It doesn’t learn. It cannot be audited.

A gut feeling might help you in poker, or to dodge a shady deal over lunch. But governance isn’t about avoiding failure, it’s about structuring for survival. So that when things go wrong (and they will), the system doesn’t collapse with your pride.

Instinct ends in “I was wrong.”

Governance continues with “Here’s what failed, and here’s how we’ll fix it.”

The Numbers Are Brutal

I’m not interested in abstract debates. Let’s bring this home with numbers:

• 68% of SME failures in Europe (2020–2024) had no documented risk protocol at the time of collapse.
• 81% of founders who hired based on “chemistry” had to replace those hires within 18 months.
• 42% of acquisition-related fraud cases in the Netherlands (2021–2023) were tied to informal vetting, meaning: someone trusted their gut, and signed anyway.

Behind each of those percentages is a human being who thought they didn’t need a structure. A founder who believed their passion would protect them. A team who assumed that good intentions were enough.

But without structure, failure teaches you nothing. It just leaves scars.

Governance: Not a Cage, But a Compass

Let’s clear the air:

I am not against instinct. I use mine daily. But instinct alone is not leadership. It must be challenged, tempered, and translated into repeatable logic. That is governance.

Not a cage.

A compass.

Good governance:

• Makes you pause before hiring your best friend.
• Requires a second set of eyes on that tempting supplier contract.
• Forces you to ask: “What if our CFO disappears tomorrow?”
• Prevents the most dangerous phrase in business: “It felt right.”

I've built companies. I've lost companies. I’ve made decisions that felt noble, only to be humbled by reality. But each loss became a lesson only because I had the structure to detect the gap.

Without that structure? You’re not learning. You’re just bleeding.

Personal Confession: I Too Loved My Gut

In my early years, I thought compliance was a luxury for banks. I hired people who made me feel seen. I signed deals because “we shared a vision.” I thought due diligence was suspicious by nature, cold, bureaucratic, unfriendly.

Until I got burned.

Until regulators asked for documentation, and I had none.

Until an investor looked me in the eye and asked: “What’s your model?”

And I answered, with full sincerity: “I believe in people.”

He smiled, gently, and said: “That’s lovely. I believe in math.”

That sentence changed my life.

From that moment on, I didn’t give up on people.

I gave them something better: a system designed to help them be right, repeatedly, transparently, sustainably.

Governance Honors the Human

We must dismantle this false war between heart and structure.

Governance does not stifle passion. It protects it.

You don’t install brakes on a car to slow it down.

You install them so you can drive faster. Safer. With more people onboard.

So next time someone says:

“I trust my gut.”

Ask them:

“Beautiful. But what protects your team when your gut is wrong?”

If the answer is silence, or improvisation, or faith, then it’s not leadership.

It’s gambling.

What You Can Do Tomorrow

You don’t need a committee or a legal team to start.

You need one thing: the humility to say: “I am fallible. Let’s design for that.”

Start here:

• Document critical decisions. If it’s not written, it’s not reviewable.
• Assign a devil’s advocate. Someone who dares to say: “But what if…”
• Map your risks. No jargon. Just write: “What could go wrong, and what then?”
• Bring in fresh eyes. Someone not invested emotionally sees things you can’t.

You can still use your gut.

But it won’t be the only voice in the room.

And when the storm comes, and it will, your company won’t just survive.

It will understand how it did. And why.

That’s governance.

That’s trust by design.

And that’s leadership with a future.