Story 268

To Story 266:

Respectfully, the situation may be more complex than it appears. And you, ma’am, are the one who appears naïve. While Fraser has clearly delivered on profitability, it’s obvious to anyone paying attention that the firm’s risk profile has increased materially — and Citi appears to be getting a pass in the current environment.

At its core, the job of a CEO is not simply to drive profit—it is to balance profit against risk. Growth without discipline is not strategy; it’s exposure. CEOs are entrusted to allocate capital, set incentives, and establish the tone that determines what risks are taken, which are mitigated, and which are ignored. When that balance is lost, the consequences are rarely immediate, but they are almost always inevitable.

Some examples:
Wells Fargo — Sales Practices Scandal
From a risk perspective, the breakdown at Wells Fargo was not a failure to identify risk—it was a failure to act on it. For years, frontline employees opened millions of unauthorized accounts to meet aggressive cross-selling targets. Internal reports, whistleblower complaints, and anomalous account metrics all pointed to systemic misconduct, yet the incentive structure remained intact because it drove revenue growth. Leadership prioritized short-term profitability over control remediation, allowing cultural and conduct risk to metastasize. The result were regulatory penalties and reputational damage that haunted the company for a decade.

Volkswagen — Dieselgate
In the Volkswagen case, the risk was technical, legal, and reputational—and it was deliberately circumvented. The installation of defeat devices to cheat emissions tests reflected a conscious decision to prioritize market share and profitability over regulatory compliance. From a control standpoint, either senior leadership was aware, or the control environment was so weak that large-scale manipulation went undetected. In both scenarios, the outcome is the same: a failure of tone at the top and an implicit acceptance that compliance risk was subordinate to financial performance.

BP
The Deepwater Horizon disaster illustrates how operational risk can be deprioritized in pursuit of efficiency and profit. BP had documented safety concerns, prior incidents, and internal warnings about cost-cutting measures impacting well integrity. Yet decisions continued to favor speed and cost containment. From a risk management lens, this was a classic case of known high-impact, low-probability risks being discounted because they had not yet materialized at scale. When they did, the consequences were catastrophic—environmental, financial, and reputational.

Boeing — Engineering Risk vs. Commercial Pressure
Boeing’s 737 MAX crisis reflects the tension between engineering integrity and commercial imperatives. The introduction of the MCAS system created new safety dependencies that were not fully disclosed to pilots or regulators. Internal communications and subsequent investigations suggest that schedule pressure and competitive dynamics influenced design and certification decisions. From a risk standpoint, this represents a failure to escalate and transparently manage safety risk, with leadership prioritizing market competitiveness and delivery timelines over robust risk mitigation.

Enron — Financial Engineering and Governance Failure
Enron’s collapse was driven by complex financial structures designed to obscure debt and inflate profitability. From a risk management perspective, the issue was not the absence of controls but their circumvention. Leadership exploited accounting loopholes and off-balance-sheet entities while continuing to project financial strength. Risk signals were present—opaque disclosures, concentration of authority, and aggressive accounting assumptions—but were ignored or rationalized because the firm was delivering outsized returns. The eventual failure exposed the fragility beneath the performance.

Back to Fraser & co — this is how it tends to play out when risk is deprioritized. It’s never a single event. It’s a slow build: leadership behavior that crosses the line and is covered up, abrupt departures that raise more questions than answers, internal frustration that starts to boil over, and operational issues that everyone knows about but no one fully owns. Until, eventually, something breaks — and by then, it’s public.

P.S. Something I’m curious about is whether one’s spouse, PR or legal team knows and/or approves of posting to this site. Since we’re on the subject, seems not without risk!