How a 7,000 Years-Old Wisdom Yijing Helps in Corporate Governance

How Yijing Helps in Corporate Governance

Corporate governance is fundamentally about one question:

How do we help an organisation succeed without allowing success to destroy it?

That is very close to the wisdom of Yijing.

1. 阴阳 Yin–Yang: Balance Power

Good governance requires balance.

Management needs authority to run the company, but the board must provide oversight. Directors should support management, but also challenge it. Companies need growth, but also controls.

Too much control kills entrepreneurship. Too little control creates excessive risk.

Yijing lesson: Good governance is not maximum control. It is the right balance between freedom and control.

Corporate governance is the brakes that allow businesses to go faster.

2. 变易 Change: Governance Must Anticipate Change

Yijing begins with change.

A risk that was small yesterday can become existential tomorrow. AI, cyber threats, regulation, geopolitics, reputation and changing customer behaviour mean boards cannot govern by looking only backwards.

A good board therefore asks: What is changing that we haven't noticed yet?

This turns governance from compliance into foresight.

3. 八卦 Ba Gua or 8 Trigrams: See the Same Problem from Different Perspectives

Management can develop tunnel vision. That is why independent directors matter.

The Ba Gua mindset encourages leaders to examine one situation from multiple perspectives.

A board considering an acquisition, for example, should not ask only:

"Will this increase profits?"

It should also examine people, finance, customers, culture, regulation, reputation, risk and long-term sustainability.

The greatest governance risk may be the perspective nobody in the room considered.

4. 五行 Five Moving Elements: Understand Interdependence

The Five Moving Elements teach that nothing operates independently.

One action generates another; another may constrain something else.

Corporate decisions work the same way.

• Cutting costs improves short-term profit—but could damage service.
• Rapid expansion creates revenue—but could weaken cash flow and controls.
• Higher sales incentives motivate employees—but could encourage misconduct.

Governance means seeing the second- and third-order consequences of decisions.

5. 64 Hexagrams: Different Situations Need Different Governance

One of Yijing's most powerful lessons is: There is no single correct response for every situation.

A start-up, family business, listed company and company in crisis cannot be governed identically.

Even within the same company, governance must evolve.

• During rapid expansion, the board may focus on risk and capability.
• During crisis, liquidity and survival.
• During succession, people and continuity.
• During an acquisition, valuation, integration and conflicts of interest.

Good governance is situational wisdom.

6. 因果 Cause and Effect: Look Beyond the Failure

Corporate disasters rarely begin on the day they become public.

• Before the accounting scandal, there may have been weak controls.
• Before the fraud, there may have been an unquestioning board.
• Before the liquidity crisis, there may have been years of aggressive expansion.

Yijing encourages us to look beyond the visible 果 (effect) to discover the 因 (cause).

That is precisely what good risk management and board oversight should do:

Don't wait for the fruit to become rotten. Find the conditions that are producing the rot.

Yijing–governance philosophy: 

Yijing teaches us to see change before it becomes crisis, imbalance before it becomes failure, and causes before they become consequences. That is also the essence of good corporate governance.