Risks and Reporting

Risk management is a cornerstone of leadership, but it’s often misunderstood—and even more often misapplied. At its best, identifying risks brings clarity, focus, and alignment to an organization. At its worst, it devolves into an elaborate performance, with teams and managers playing to an audience rather than addressing real concerns.

This isn’t to say risk reporting doesn’t have its place. Done well, it surfaces the unknowns that could derail strategic objectives and provides leaders with a chance to mitigate them before they become critical. But when mismanaged, the process shifts from solving problems to creating optics.

Let’s explore where this goes wrong and how leaders can course-correct.

The Subtle Drift Toward Performance

As organizations grow, so too does the distance between the executive team and the work being done. Leaders turn to reports, metrics, and dashboards as proxies for reality, and that’s where things start to break down.

Risk reporting, in particular, becomes fertile ground for an anti-pattern: the expectation that managers regularly identify risks, even when none truly exist. It’s easy to see how this unfolds:

• If no risks are reported, it raises questions. Is the manager inattentive? Are they too complacent? Worse, are they hiding something?
• If risks are reported too frequently, it raises alarms. Is the team struggling? Are there fundamental issues in execution or planning?

Caught between these pressures, managers often gravitate toward a middle ground that’s safe but hollow—fabricating risks or inflating minor issues into major ones. It’s not malicious; it’s survival. After all, organizations tend to reward managers who “proactively” identify and resolve risks, even when the risks in question are imaginary.

The result? A culture that values appearances over outcomes, where the focus is on managing up rather than managing reality.

The Cost of a System Designed for Show

When leaders create systems that prioritize optics, they inadvertently penalize the very behaviors they should be encouraging. Teams that solve problems quietly and efficiently, preventing risks from materializing in the first place, go unnoticed. Meanwhile, those who make a spectacle of minor inconveniences are celebrated for their “proactive” approach.

Worse, this culture of performance blinds leaders to genuine risks. In a sea of manufactured drama, it’s easy to miss the signals that matter. Real threats—the kind that derail projects, erode trust, or compromise strategy—go unnoticed until it’s too late.

Changing the Incentive Structure

The solution isn’t to abandon risk reporting but to reframe its purpose and execution. Leaders must focus on substance, not theater, and create an environment where teams feel safe to report real risks without fear of punitive action or unnecessary scrutiny.

1. Rethink Expectations Risks don’t occur on a schedule. Stop expecting weekly updates that manufacture problems for the sake of appearances. A good risk report may regularly be a blank one, provided it’s backed by thoughtful planning and execution.
2. Engage Beyond the Metrics Metrics and reports should inform, not dictate. Take the time to engage directly with teams. Randomly audit processes, attend meetings, and ask questions—not to micromanage, but to understand.
3. Reward Quiet Competence Celebrate teams that consistently deliver without fanfare. The managers who identify risks at the planning stage and mitigate them before they escalate are the unsung heroes of any organization.
4. Reframe the Conversation Risk reporting should be a tool for insight and collaboration, not a box to check or a performance to critique. When teams raise risks, treat it as an opportunity to align resources and support, not a chance to assign blame.

Beware the Anti-Pattern

Perhaps the most harmful outcome of this anti-pattern is the erosion of trust. When managers feel pressured to fabricate risks, they lose faith in the system. When teams see those managers rewarded for optics rather than outcomes, they disengage. And when leaders rely solely on reports to gauge the health of their organization, they lose touch with the very reality they’re trying to lead.

Building a Better System

Effective risk management isn’t about avoiding failure at all costs. It’s about creating an environment where failure, when it happens, is a learning opportunity—not a crisis.

This requires leaders to step beyond the superficial. Risk isn’t just a line item in a report; it’s a signal, a story, a chance to understand what’s really happening in your organization. The best leaders don’t just read the metrics; they read between the lines, engaging with their teams to uncover the truths that metrics alone can’t reveal.

By focusing on outcomes over optics and fostering a culture of trust and transparency, leaders can ensure that risk management serves its true purpose: not to perform, but to protect and enable the success of the organization.