The Traps of Risk Management

Despite all the talk about how risk management is more important than ever, why do we still see significant risk management failures in the headlines?

It's because leaders fall into one of three traps. They view the risk as (1) it's not a big deal. (2) somebody else is handling it/not my job. (3) I'm not going to rock the boat.

So what can be done?

Let's move from "What could go wrong?" to "What are we assuming won't go wrong and why?" Assumptions are blind spots. This is where the real risk exposure hides. The following recommendations can reduce vulnerabilities and improve your institution's risk management posture.

💡 Assign risk owners: A risk without a named human accountable leads to complacency.

💡 Account for risk velocity: Understanding when the risk impact is felt helps institutions plan and respond faster. With 24-hour news cycles and social media firestorms, reputational risks often escalate overnight. Stellar crisis communication is essential.

💡 Support faculty and staff in raising concerns early, before they become crises.

💡 Treat risk as a conversation, not a check-box. You can have a risk register, a risk appetite statement, a colorful heat map, and an extensive ERM plan, but if the documents live in a shared drive and risk committee meetings happen once or twice a year, your best-laid plans will die in obscurity.

⭐ Risk management isn't a compliance exercise. It's a discipline that has to live in the room where decisions are made. ⭐

The institutions that will thrive in times of volatility and uncertainty are those that build cultures where people are accountable, challenge assumptions, and speak up— before the headlines do it for them.

👉 Which of the recommendations above do you believe is the most critical?