Leadership Risk Isn't Just a C-Suite Concern

Companies that invest in leadership development see real returns. According to Brandon Hall Group, organizations with strong leadership development programs are 1.5 times more likely to be financially high-performing, reinforcing the clear connection between leadership strength and business success (Brandon Hall Group, 2015).


For small to mid-sized businesses, this risk can be especially high. As teams expand and complexity increases, the informal leadership structures that worked early on can start to crack. That’s where proactive leadership development and risk mitigation go hand-in-hand.


The Leadership Gap Is a Hidden Business Risk

According to a recent CPHR Alberta report, talent development and leadership gaps remain one of the top five organizational risks (CPHR Alberta, 2023). The consequences are rarely immediate, but they compound over time:

• Missed growth opportunities

• High-potential employees leaving due to lack of career clarity

• Poor team morale when unprepared managers struggle to lead

• Strategic drift from lack of alignment at the top

A growing company without a leadership pipeline is like a car without a spare tire, it might keep rolling, but one unexpected bump can send the whole operation into a tailspin.


Risk Mitigation Starts with Leadership Insight

The first step in mitigating leadership risk is to move from guesswork to clarity. That means using structured tools like leadership assessments, succession planning frameworks, and targeted coaching to surface the actual capabilities of current and emerging leaders.

In professional services firms, for example, it’s common to see technically strong employees promoted into management roles. While they excel in their areas of expertise, they often lack key leadership capabilities like delegation, feedback, and emotional

intelligence (Gallo, 2016). Without proper development, this can lead to stalled projects, disengaged teams, and higher turnover. Leadership assessments and focused coaching are essential to identify these gaps early and build the skills needed to lead effectively.


Common Leadership Risks in SMBs

Every organization faces different risks, but these are some of the most common leadership vulnerabilities seen in growth-stage companies (SHRM, 2022):

• Lack of succession planning: Only one person knows how to run a key function, creating bottlenecks and burnout.

• Unclear decision-making authority: Teams waste time waiting for approvals or duplicating efforts due to ambiguous roles.

• Promotion without preparation: High performers are promoted into leadership roles without training, leading to micromanagement or misalignment.

• Poor feedback culture: A lack of honest dialogue means small issues snowball into bigger people problems.

• Leadership misfit: A leader’s natural style may clash with the culture or needs of a specific team or situation.

Mitigating these risks requires more than a one-time workshop. It takes intentional development, structured tools, and reinforcement over time (SHRM, 2022).


What Effective Mitigation Looks Like

The most successful companies don’t wait for a leadership crisis to take action. They build leadership strength proactively. Here’s what that looks like:

• Leadership assessments are used during hiring and promotions to identify fit, style, and potential blind spots.

• Customized coaching programs help leaders build the exact skills they need in real time, tied to their actual challenges (International Coaching Federation, 2022).

• Leadership training cohorts (such as PowerUp Leadership’s “Coaching Skills for Managers” or “Authentic Leadership” programs) create a shared foundation across the organization.

• Succession maps identify who is ready or could be ready for key roles in 12–24 months, creating a proactive development plan (SHRM, 2022).


As companies grow, the complexity of people management increases exponentially. Systems, tools, and strategy all matter but none of them work without effective leadership behind them (McKinsey & Company, 2018). Investing in leadership development isn’t a “nice to have” for big companies, it’s a risk management strategy for every business serious about sustainable growth.


Interested in assessing your leadership risk? Visit powerupleadership.ca to explore leadership assessments, coaching programs, and facilitated team workshops tailored to your growth stage.


Layan Jasser

PowerUp Leadership


References:

  1. Brandon Hall Group. (2015). Leadership Development Benchmarking Report.
  2. CPHR Alberta. (2023). HR Trends Report. Retrieved from https://www.cphrab.ca
  3. Gallo, A. (2016). “Why People Really Get Promoted.” Harvard Business Review. https://hbr.org/2016/06/why-people-really-get-promoted
  4. SHRM. (2022). Succession Planning Toolkit. Society for Human Resource Management.
  5. International Coaching Federation. (2022). ICF Global Coaching Study.
  6. McKinsey & Company. (2018). The organization of the future: How to win in a fast-changing environment.




The views and opinions expressed in this blog post belong solely to the original author(s) and do not necessarily represent the views and opinions of CPHR Alberta.



By Jessica Jaithoo October 16, 2025
Internal controls are not just a box on a checklist; they are a trust-building tool. When HR leads with transparency, integrity, and strong processes, it sends the message that the organization values trust and accountability. Internal controls can also protect against errors, fraud, and damage to its reputation. Internal controls support fair hiring, secure data management, and consistent documentation, helping HR stay aligned with laws, privacy standards, and compliance expectations. What are internal controls? Internal controls are an organization’s procedures, policies, and processes. They ensure: Compliance with laws, regulations, and policy Accuracy in reporting Overall efficiency and transparency in operations Internal controls include setting out approval authority, role-based system access, audit trails, and segregation of duties. Once your controls are in place, continuous monitoring them further reduce risk by identifying issues early and providing timely feedback on areas where additional training may be needed. Examples of HR internal controls and why an accountant might consider them important Hiring Background checks ensure individuals hired to handle sensitive data don’t have histories of financial misconduct Signed employment agreements support key inputs into the payroll process and can serve as audit documentation Approval workflow for hiring decisions help prevent unauthorized payroll expense s Payroll Segregation of duties between the person hiring and the person setting up payroll can prevent conflicts of interest and fraud Reconciliations of payroll reports with HR records help ensure records match the source data, which supports accurate financial reporting Compensation An assignment of authority for employee events (e.g., salary change, promotions) ensures changes are authorized and reduces the risk of unauthorized payments Supervisor approval on timecards ensures information sent to payroll is accurate Employee records Secure employee records ensure payroll, benefits, and compensation figures used in financial reporting are reliable and safe Tracking changes made to records provides a trail for internal and external auditors Policy and compliance Key company policies requiring an employee’s signature can mitigate financial risks and ensure employees are expected to be aware of an organization’s policies A whistleblower policy provides a mechanism to uncover fraud or misappropriation of an organization’s assets Access and data controls Role-based access to systems limits access to financial systems and reduces the risk of data manipulation Monitoring controls Exception reporting (e.g., duplicate payments) supports quick identification of errors and accuracy of financial reporting Internal HR audits help ensure HR-related financial activities have proper controls and the controls are working as designed By having an HR department that designs and implements internal controls, you are creating a stable system of checks and balances, minimizing risk in more ways than you might expect! About the author: Kristy Mielke CPA, CA fosters the professional growth of Alberta’s 32,000 Chartered Professional Accountants (CPAs) as the Director of Professional Development and Learning at CPA Alberta. She has previously worked in public practice and internal audit, and in addition to being a CPA, she is a Certified Internal Auditor and Certified Fraud Examiner.
By Jessica Jaithoo October 7, 2025
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By Jessica Jaithoo October 7, 2025
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