The Best CFOs don’t Avoid Risk. They Help Businesses Take Better Risks

There’s a common misconception about risk in business.

It is often framed as the thing responsible leaders are supposed to minimise, constrain or avoid. We sometimes speak as though good governance means saying no, slowing things down or preventing uncertainty from entering the system.

That’s understandable, but incomplete.

In reality, no business grows without risk. New markets involve risk. Innovation involves risk. Hiring involves risk. Acquisitions involve risk. Technology adoption involves risk. Even standing still can involve risk if the world around you is changing.

The real challenge is not whether risk exists. It is whether the organisation is equipped to understand, prepare for and take the right risks.

That was one of the most interesting themes in my conversation with Melissa Jolly on the CFO Access Podcast.

Mel works in insurance and risk advisory, so you might expect her to advocate for caution above all else. But what came through very clearly is that her philosophy is not about avoiding risk. It is about making informed decisions.

In fact, one of the more compelling tensions in the conversation was this: professionally, she helps businesses prepare for the downside. Personally, she is a strong believer in saying yes to opportunity.

Far from being contradictory, those two ideas belong together.

Risk and opportunity are not opposites

One of the mistakes businesses make is treating opportunity and risk as separate conversations. The commercial team talks about growth. The finance team talks about controls. The strategy team looks forward. Risk teams look for what might go wrong.

But in practice, every meaningful opportunity arrives with associated risk.

The role of a strong CFO is not to stand in the way of that reality. It is to make sure decisions are made with clarity.

That means asking practical questions.

What could go wrong?
What would happen financially if it did?
How likely is it?
Can we mitigate it?
Can we insure part of it?
Can we absorb it if we are wrong?

This is not about negativity. It is about decision quality.

As Mel highlighted in the podcast, businesses should not let insurance policies dictate strategy. But neither should they ignore the commercial consequences of the risks they are taking. The better path is informed ambition.

That phrase matters.

The business should still pursue the opportunity. It should just do so with eyes open.

The difference between a reckless risk and a considered one

We also touched on an important distinction in the conversation: the difference between a foolish risk and a sensible one.

That distinction matters in business and in life.

A reckless risk is usually poorly researched, emotionally driven, unsupported by evidence and taken without understanding the downside.

A considered risk is different. It is informed by preparation, input from others, testing of assumptions and awareness of what could happen if things don’t go to plan.

This is where CFOs have an enormous role to play.

When finance leaders are at their best, they help the organisation separate confidence from evidence. They challenge assumptions, stress-test plans, bring data to the table and frame consequences in commercial terms.

That doesn’t make them blockers. It makes them enablers of better risk-taking.

In fact, many of the strongest growth decisions in business are only possible because someone in finance helped clarify the downside and shape the controls.

That’s real strategic value.

The comfort zone is not always safe

Another part of the conversation that stayed with me was the broader human point. If individuals and businesses never leave their comfort zone, they don’t grow.

That’s true for careers, companies and leadership teams.

Starting a business is a risk.
Hiring the next senior leader is a risk.
Launching a new product is a risk.
Speaking publicly is a risk.
Expanding overseas is a risk.
Changing systems is a risk.

But avoiding all of those things in the name of safety can create a different kind of danger: stagnation.

Finance leaders are sometimes cast as the guardians of caution. There’s some truth in that. But the better version of the role is more nuanced. Great CFOs don’t say no to everything uncertain. They create the conditions in which the organisation can move forward without being naive.

That’s very different.

Learning comes through exposure

Mel also made a broader point about society and overprotection. While the discussion moved beyond business, I think the implication for leadership is relevant.

People and organisations learn through exposure to challenge. Mistakes, when managed properly, teach judgment. Failure, within tolerable bounds, can improve capability. Feedback from things that did not go to plan often becomes the basis for stronger systems and better future decisions.

Over-regulating every action or trying to remove all uncertainty can make people more fragile, not more capable.

In business, we see this when organisations become so worried about the downside that they stop experimenting, stop moving and stop adapting. Eventually, the absence of smart risk-taking becomes a strategic weakness.

This is one reason I believe CFOs should play a visible role in strategic conversations, not just financial reporting.

They are uniquely positioned to help leaders answer the most important growth question of all: can we pursue this opportunity in a way that’s bold enough to matter and disciplined enough to survive?

What practical leadership looks like

So what does better risk-taking look like in practice for CFOs?

First, frame risk in business terms, not abstract terms.
Translate uncertainty into cash flow, profitability, operational disruption, covenant impact or capital requirement.

Second, involve the right advisers early.
As Mel noted, whether it’s insurance, legal, tax or cyber, better outcomes usually happen when expertise is brought in before commitments are finalised.

Third, challenge assumptions without killing momentum.
Strong finance leaders know how to ask hard questions without becoming the department of no.

Fourth, distinguish between risks the business understands and risks it’s taking by default.
That’s where many surprises live.

Fifth, support a culture where reasonable experimentation is acceptable.
If teams are punished for every imperfect outcome, they will stop taking the kinds of risks that lead to innovation.

Final thought

One of the best lines from our conversation was essentially this: if you have the information and you are comfortable with the downside, then the rest is upside.

That, to me, is a useful leadership lens.

Risk is not the enemy of progress. Poorly understood risk is.

The best CFOs help businesses pursue ambition with discipline. They turn uncertainty into better questions. They support opportunity without ignoring the downside. They create confidence not by pretending nothing can go wrong, but by ensuring the business is prepared if it does.

If you want to hear a thoughtful conversation about how this applies to business, insurance, decision-making, and leadership more broadly, I encourage you to listen to my full discussion with Mel Jolly on the CFO Access Podcast.

It is a valuable reminder that the goal is not to avoid risk. The goal is to take the right risks, for the right reasons, with the right preparation.

Listen to the full conversation with Melissa Jolly on the CFO Access Podcast. It may save you from confusing a valuation with a decision.