If leadership transitions are not planned, what risk increases?

• A. Leadership continuity risk
• B. Market volatility risk
• C. Compliance risk
• D. Reputation risk

Answer: (A)

When leadership transitions aren’t planned, the immediate and direct concern is leadership continuity risk. If there’s no prepared succession or interim plan, essential leadership roles can be left vacant or filled by someone not ready, leading to delays in decisions, misalignment in strategy, and gaps in accountability. This disrupts the organization’s ability to maintain steady governance and a clear course of action during times of change, which is the core of continuity risk. Other risks like market volatility, compliance breaches, or reputation damage can occur, but they’re more indirect consequences; the unplanned transition most directly threatens the ongoing ability to lead and govern consistently.