Higher risk is associated with the possibility of higher reward.
Much of history was written by those who dared to take risks.
Unfortunately, we live in a world where seemingly capable but ultimately dishonest people leverage the promise of greatness to defraud investors and manipulate the general public.
As the founder of Theranos, once valued at nine billion dollars, Elizabeth Holmes was named by Forbes as the youngest and richest self-made female billionaire in the United States. The following year, Fortune named her in their article, “The World’s 19 Most Disappointing Leaders.” In response to a bombshell report that the lab results of her blood testing invention were falsified, her now infamous words were, “This is what happens when you work to change things, first they think you’re crazy, then they fight you, and then all of a sudden you change the world.” Holmes was sentenced to jail for 11 years on charges of fraud.
As a graduate of the Massachusetts Institute of Technology and the son of two well-respected Stanford Law Professors, Sam Bankman-Fried had a fall from grace that also made headlines. Bankruptcy had been declared after it was revealed that the former director of an altruistic center had transferred billions of customer funds from his FTX trading platform towards exotic, high-risk investments at his quantitative trading firm Alameda Research—all without disclosure. He had apparently been all too comfortable with risk, mishandling funds without ethical discretion.
Nasdaq-traded and San Diego-based autonomous truck startup TuSimple lost nearly half of its valuation after an investigation revealed that its CEO may have breached fiduciary duties for their involvement in transferring financial and technical information to a Chinese startup. The news is shocking in an industry that is rife with challenges in the era of COVID and labor tensions.
The American economy relies on trucking. Trucking is a risky business—so much so that the United States Federal Motor Carrier Safety Administration requires that fleets meet insurance requirements in order to operate. Risks of bodily injury and property damage are inherent and must be mitigated to insure or compensate parties in the event that losses occur. Commercial trucking fleets require specialty insurance, which can be found here. Without specific legal documentation and comprehensive insurance coverage, owners and operators are vulnerable to the risk of financial loss that has the potential to severely compromise the viability of the business.
“In addition to filing an application for operating authority, all applicants for motor carrier, freight forwarder, and broker authorities must have specific insurance and legal process agent documents on file before the FMCSA will issue the authorities.”— United States Federal Motor Carrier Safety Administration
Only the future can tell what comes of today’s risk-takers. For those who take risks, it is important to remember that taking shortcuts to success may offer more immediate fame, power, and money, but rarely without ramifications. Without ethics and risk management, leaders put their businesses in danger of not only destroying their reputations but also the lives of all stakeholders involved.