Key Person Risk
This is the risk that the firm or organisation is impacted or suffers loss due to resignation or departure of a key person (or a small number of key personnel) within the organisation. This risk may be due to one or more of the following:
- Specific technical, operational, organisational or other business knowledge that is not documented or known by other individuals in the organisation;
- Key business relationships (with customers, suppliers, shareholders or other stakeholders including government bodies) are controlled by a key individual;
- A lack of senior management skills or management depth to oversee the strategic and business management of the organisation in the event of the departure of a key individual (such as a CEO).