27. When “Low Risk” Becomes the Most Dangerous Label
Every organisation uses risk labels.
High.
Medium.
Low.
They are necessary. Without categorisation, risk management becomes unworkable. Leaders need a way to prioritise attention, resources, and controls.
The problem is not the labels themselves.
The problem is what happens after something is labelled “low risk.”
That label often signals the end of curiosity.
How “Low Risk” Slowly Disappears from View
Once an activity, process, or area is deemed low risk, it receives less attention. Reviews become lighter. Controls are simplified. Reporting frequency decreases.
Again, this is rational. Leadership attention is finite.
But over time, familiarity replaces vigilance.
The same people run the same processes. Exceptions are handled informally. Small deviations are tolerated because “nothing has ever gone wrong here.”
Risk does not disappear in these environments. It goes quiet.
Audit findings in low-risk areas often come as a surprise because no one was looking closely enough to see it forming.
Why Familiarity Distorts Judgment
Familiarity creates confidence. Confidence reduces scrutiny.
When leaders see a process functioning year after year, they assume stability. When teams have never experienced a failure, they assume resilience.
This is where risk labels become misleading.
“Low risk” often means low historical impact, not low potential impact. The distinction matters.
Many control failures occur in areas that were once stable, predictable, and trusted. The environment changes. Volumes increase. Technology shifts. Key people leave. The label stays the same.
Risk frameworks struggle to capture this dynamic unless leaders deliberately challenge assumptions.
The Audit Perspective on “Low Risk”
Auditors are trained to pay attention to low-risk areas for precisely this reason. They understand that neglect creates vulnerability.
When an audit identifies issues in low-risk categories, leaders often react defensively. “This was not a focus area.” “The risk was assessed as minimal.”
Those statements may be accurate. They are also beside the point.
The issue is that the risk was once low and that the label prevented reassessment.
Good governance is about freezing risk ratings and revisiting them.
How “Low Risk” Becomes Organisational Blindness
Over time, “low risk” becomes shorthand for “not worth discussing.”
Meetings move quickly past it. Dashboards highlight other areas. Questions stop being asked.
This creates a dangerous pattern.
When something eventually goes wrong, the organisation is caught off guard. The response is disproportionate. Controls are added aggressively. Scrutiny increases overnight.
Leaders then ask why no one raised the issue earlier.
The uncomfortable answer is often that the system discouraged curiosity.
A Leadership Responsibility, Not a Framework Problem
It is tempting to treat this as a risk framework limitation. To adjust scoring models or add new categories.
Those changes help, but they do not address the core issue.
The real safeguard is leadership behaviour.
Leaders who periodically ask, “What are we assuming here?” keep low-risk areas visible. They invite challenges without creating noise. They understand that risk is not static.
This requires intentional review.
For example, when there is growth, restructuring, system change, or turnover, previously low-risk areas deserve fresh attention.
Practical Ways to Reintroduce Vigilance
There are simple ways leaders can prevent low-risk blindness without overwhelming the organisation.
One approach is rotation. Periodically review a small number of low-risk areas each year with the same seriousness applied to high-risk ones. This sends a signal that no area is immune to scrutiny.
Another is behavioural questioning. Instead of asking whether controls exist, ask whether they still make sense. Are people still following them? Do they still align with how work is actually done?
Finally, pay attention to language. When teams consistently describe something as “business as usual,” it is worth pausing. Routine is often where assumptions hide.
What This Means for Audit Outcomes
Organisations that revisit low-risk areas proactively tend to experience fewer audit surprises. Findings, when they occur, are smaller and easier to address.
More importantly, audit conversations shift. Instead of defending why something was overlooked, leaders can explain how they are actively challenging assumptions.
This builds credibility. Audit becomes a dialogue rather than a test.
Closing
“Low risk” is a useful label, but it is not a permanent truth.
The most dangerous risks are often the ones that feel familiar, stable, and uninteresting. They do not demand attention until something breaks.
Strong leaders understand this. They keep curiosity alive even when there is no immediate reason to worry.
If you are reviewing risk assessments this year, consider which areas have not been questioned simply because they have always been fine.
That is often where the next issue begins.
That's all for this week.
See you on Tuesday!
– Jonathan
P.S. Even “low risk” areas deserve a second look. Familiarity can hide emerging issues until it’s too late. If this resonates, it might be worth a conversation about which assumptions need challenging before they turn into surprises. Reach out to me - I’ll guide you.
Disclaimer: This newsletter is general information only and is not financial advice. Always do your own research and consult a professional about your circumstances.
