The Risk Overhang – Which Can Lead to the Risk Hangover

Corporate, organizational and personal risk profiles are dynamic and situational.  Dynamic in that they change often.  By the nature of organizations having a more gradual decision-making process than individuals, their risk profile changes more gradually.  Individuals, on the other hand, may change their risk-profile much more often based on successes, set-backs, access to capital, financial security – or lack of it – and countless other variables.

Organizations are often overly risk-seeking in an upswing and overly risk-averse in a downswing.  Call it the risk overhang, which can lead to the risk hangover.  It is a function of excess – a risk posture that is no longer in alignment with the business and economic environment.  It overhangs the change in conditions.
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It is all a matter of balance – or lack of it.  A successful risk posture always is.

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