Beyond your Controls – Why every Risk Manager must understand the Concept of Executive Debt.
- Daniela Parker
- May 25
- 4 min read
I recently had the pleasure of chatting with Monty Fowler and Mark Dallmeier from AspireSix on our ByteWise podcast, and let me tell you, their concept of "Executive Debt" hit home. As someone who's spent years in the financial services trenches, it's a term for something I think we’ve all seen, felt, and maybe even (let's be honest) occasionally contributed to. So, I wanted to unpack what they shared and specifically what it means for us – the risk management professionals trying to keep our institutions safe and sound.
So, What’s This "Executive Debt" Thing Anyway?
Monty and Mark described "Executive Debt" as the long-term fallout from short-term decisions leaders make – often driven by gut feel, ego, a refusal to see market realities, or just plain old strategy avoidance. Think of it like technical debt, but for all those other big calls. It’s that familiar story where today’s quick fix becomes tomorrow’s massive headache, and the "what if this goes wrong?" question never quite gets asked.
What really struck me was Mark’s point: executive debt is often the parent of technical debt and, more critically for our world, a ballooning pile of unmanaged corporate risk. You can’t have one without the other, because a decision made (or not made) at the top is what creates the mess downstream. Sound familiar?
When executive debt is running rampant, we in risk management are often the ones left trying to hold things together with duct tape and good intentions. Mark gave some classic examples that I’m sure will make you nod:
That brilliant new security recommendation getting shot down because of "how we've always done things."
Leadership suddenly deciding on a whole new direction after a chance conversation on a plane, ignoring all internal expertise.
Cybersecurity risks being brushed off until something catastrophic happens.
It means our carefully planned risk strategies get ignored, resources dry up for essential projects (because of some other short-sighted call), and the "why" behind what we do gets lost in translation from the ivory tower to the front lines. This isn't just frustrating; it makes it incredibly hard to build that risk-aware culture we’re all striving for. And let’s not forget talent debt – good people, as Glen pointed out on our show, will walk if they feel their work isn't valued or if they're just told to "do the thing" without understanding the purpose, like Monty experienced.
Can We Actually Make a Dent? What Risk Pros Can Do.
Now, I know what you’re thinking. Being the "prophet in your own land" is tough, and as I’ve often called it, sometimes it feels like you need "credibility by invoice" (bringing in an outsider to say what you’ve been saying all along!) to get heard. But that doesn't mean we're helpless. Here’s what I took away from Mark and Monty’s insights, tailored for our profession:
Fight Gut Feel with Facts: Monty’s point about using AI for more data-driven sales goals can apply to us. Let's bring solid data, quantitative risk assessments, and established frameworks to the table. Make the risks (and the benefits of mitigation) undeniable.
Become the "What If?" Champion: For those big "one-way door decisions" (thanks, Jeff Bezos, via Monty!), we can be the ones pushing for proper scenario planning. What happens if Plan A fails? What are Plans B and C?
Tie Everything to the Big Picture: We must understand our institution's strategic goals and clearly articulate how our risk initiatives support them. If a strategy overlooks a massive risk, it’s our job to (tactfully) point it out.
Cultivate Your Own Pockets of Sanity: Even if the overall culture is challenging, what can you do within your own team or sphere of influence to encourage open communication and make sure people understand the "why"?
Educate Upwards (Smartly): Sometimes, leaders genuinely don’t see the full picture. Clear, concise, business-focused briefings on key risks can make a difference. Share resources and case studies.
Know When External Backup Helps: If you’re hitting a brick wall, advocating for an external review or workshop (credibility by invoice!) can sometimes provide that necessary objective voice.
Push for Leadership Coaching & Mentorship: Mark rightly said that leaders who are open to coaching, mentorship, and being vulnerable are the ones who can change. We can champion the value of this, not just for them, but for everyone.
It Starts With Acknowledging the Elephant in the Room
What Mark and Monty really highlighted is that executive debt isn't just some theoretical concept – it's real, it's damaging, and it affects real people. As Monty put it so powerfully, every leadership decision "is going to affect someone's child." That’s a heavy thought, but it underscores the responsibility.
For us in risk management, seeing the signs of executive debt is step one. The next is finding those strategic, data-backed, and sometimes courageous ways to advocate for better decisions and a healthier, more risk-aware way of operating. It’s a marathon, not a sprint, but it’s work worth doing.
If you’re grappling with some of these challenges in your institution and want to explore how a focused coaching partnership could help you build more impactful programs and navigate these dynamics, I’d love to chat. Let’s figure out how to strengthen your approach together.
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