Home locked Advice Editor's Choice Hot Tips Advice Managing key person risk Matt Vickers July 14, 2015 What is key person risk? Key person risk occurs when a business or business unit becomes heavily reliant on a key individual(s). Although this risk is typically found in small to medium enterprises (SMEs), it occurs in companies of all scales. The most notable examples of key person risk occur in some of the world’s largest companies. The late Steve Jobs or Sir Richard Branson are two prominent modern era key people. Most businesses of similar scale to Apple and Virgin have processes and frameworks in place that are well structured to delineate risk away from any one individual. At Apple, Steve Jobs was a visionary and key driver of innovation. It is nearly impossible to formulate a process or business model which consistently delivers innovation. Apple, even as one of the world’s most valuable companies was, and probably still is, reliant upon a select few innovators. At Virgin, Sir Richard Branson is the emblematic heart and soul of Virgin. The company’s values are an extension of his ethos. Virgin’s brand value is inexorably linked to its founder’s personal goodwill. Fortunately for large scale corporates, although key person risk can be nominally substantial, companies are well capitalised to weather the loss. The same cannot always be said for SMEs. Do you have key people? If you own, manage or work within a SME, you’ll likely be able to narrow in on a select