Key Person Risk Framework

KEY PERSON RISK PHILOSOPHY

Understanding Key Person Dependency

KEY PERSON RISK FUNDAMENTALS

WHY KEY PERSON RISK MATTERS:
☐ Startups depend on a few key people
☐ Sudden departure can cripple operations
☐ Investors evaluate key person risk
☐ Customers may have key person clauses
☐ Insurance exists for this risk

CEO'S ROLE IN KEY PERSON RISK:
☐ Identify critical dependencies
☐ Ensure succession planning
☐ Require documentation
☐ Monitor retention risk
☐ Report to board

THE KEY PERSON REALITY:
"Every startup has key people without
whom the company would struggle. The
CEO's job is to minimize this dependency
over time through documentation, cross-
training, and succession planning."

KEY PERSON RISK FACTORS:
☐ Single point of failure
☐ Unique knowledge/skills
☐ Critical customer relationships
☐ Technical expertise concentration
☐ Institutional memory
☐ No backup identified
☐ Limited documentation

MITIGATION STRATEGIES:
1. Documentation (capture knowledge)
2. Cross-training (build redundancy)
3. Succession planning (identify successors)
4. Retention (keep key people)
5. Insurance (transfer financial risk)

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COMPREHENSIVE KEY PERSON FRAMEWORK

Key Person Risk Framework

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KEY PERSON RISK FRAMEWORK
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COMPANY: _______________
Assessment Date: _______________
Last Updated: _______________

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SECTION 1: KEY PERSON IDENTIFICATION
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KEY PERSON INVENTORY:

| Name | Role | Criticality | Why Critical | Risk |
|------|------|-------------|--------------|------|
| | CEO | High | | H/M/L |
| | CTO | High | | H/M/L |
| | CFO | Medium | | H/M/L |
| | VP Sales | Medium | | H/M/L |
| | VP Eng | Medium | | H/M/L |
| | | | | H/M/L |
| | | | | H/M/L |

CRITICALITY CRITERIA:
High: Departure would significantly impact operations
Medium: Departure would cause disruption
Low: Role can be covered/replaced quickly

RISK FACTOR ASSESSMENT:
| Person | SPOF | Unique Skills | Key Relationships | No Backup | Poor Docs | Risk Score |
|--------|------|---------------|-------------------|-----------|-----------|------------|
| | ☐ | ☐ | ☐ | ☐ | ☐ | /5 |
| | ☐ | ☐ | ☐ | ☐ | ☐ | /5 |
| | ☐ | ☐ | ☐ | ☐ | ☐ | /5 |
| | ☐ | ☐ | ☐ | ☐ | ☐ | /5 |

═══════════════════════════════════════
SECTION 2: INDIVIDUAL MITIGATION PLANS
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KEY PERSON MITIGATION TEMPLATE:

KEY PERSON: _______________
Role: _______________
Criticality: ☐ High ☐ Medium ☐ Low
Risk Level: ☐ High ☐ Medium ☐ Low

WHY CRITICAL:
☐ Unique technical knowledge
☐ Key customer relationships
☐ Strategic/operational expertise
☐ Institutional memory
☐ Team leadership
☐ Other: _______________

DOCUMENTATION STATUS:
| Area | Documented | Location | Last Update |
|------|------------|----------|-------------|
| Key responsibilities | ☐ Y ☐ N | | |
| Critical processes | ☐ Y ☐ N | | |
| Decision authority | ☐ Y ☐ N | | |
| Key relationships | ☐ Y ☐ N | | |
| Technical knowledge | ☐ Y ☐ N | | |

Documentation completeness: ___%

BACKUP & CROSS-TRAINING:
Primary backup: _______________
Backup readiness: ☐ Ready ☐ Partial ☐ None

Cross-training plan:
| Skill/Knowledge | Current Owner | Target Backup | Status |
|-----------------|---------------|---------------|--------|
| | | | ☐ Complete ☐ In progress |
| | | | ☐ Complete ☐ In progress |
| | | | ☐ Complete ☐ In progress |

SUCCESSION PLANNING:
Internal successor: _______________
Development needs: _______________
Timeline to ready: _______________

External hire criteria:
☐ Defined ☐ Not yet

Emergency succession plan:
Who would step in immediately: _______________
For how long: _______________
Gaps to address: _______________

RETENTION MEASURES:
| Measure | Status | Notes |
|---------|--------|-------|
| Competitive comp | ☐ Yes ☐ No | |
| Equity vesting | ☐ Cliff ☐ 4-year | |
| Recent refresh | ☐ Yes ☐ No | |
| Engagement level | ☐ High ☐ Med ☐ Low | |
| Retention risk | ☐ Low ☐ Med ☐ High | |
| Career conversation | ☐ Recent | |

Retention concerns: _______________

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SECTION 3: KEY PERSON INSURANCE
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KEY PERSON INSURANCE STATUS:
| Person | Role | Coverage | Premium | Beneficiary |
|--------|------|----------|---------|-------------|
| | CEO | $ | $ | Company |
| | CTO | $ | $ | Company |
| | | $ | $ | Company |

Total coverage: $_____
Total premium: $_____/year

Coverage adequacy:
☐ Adequate for replacement cost
☐ Review needed

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SECTION 4: RISK DASHBOARD
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KEY PERSON RISK DASHBOARD:
| Role | Person | Criticality | Backup | Docs % | Risk | Trend |
|------|--------|-------------|--------|--------|------|-------|
| CEO | | High | Y/N | __% | H/M/L | ↑↓→ |
| CTO | | High | Y/N | __% | H/M/L | ↑↓→ |
| CFO | | Medium | Y/N | __% | H/M/L | ↑↓→ |
| VP Sales | | Medium | Y/N | __% | H/M/L | ↑↓→ |
| VP Eng | | Medium | Y/N | __% | H/M/L | ↑↓→ |
| | | | Y/N | __% | H/M/L | ↑↓→ |

OVERALL KEY PERSON RISK:
☐ Low (all mitigations in place)
☐ Medium (some gaps)
☐ High (significant dependencies)

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SECTION 5: ACTION PLAN
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PRIORITY ACTIONS:
| Priority | Action | Person | Owner | Due |
|----------|--------|--------|-------|-----|
| 1 | | | | |
| 2 | | | | |
| 3 | | | | |
| 4 | | | | |

REVIEW CADENCE:
☐ Quarterly key person review
☐ Annual succession planning
☐ Post-departure lessons learned

Key Person Risk Dashboard

Role	Person	Backup Ready	Documentation	Retention Risk	Overall
CEO		☐ Y ☐ N	__%	H/M/L	H/M/L
CTO		☐ Y ☐ N	__%	H/M/L	H/M/L
CFO		☐ Y ☐ N	__%	H/M/L	H/M/L
VP Sales		☐ Y ☐ N	__%	H/M/L	H/M/L
VP Eng		☐ Y ☐ N	__%	H/M/L	H/M/L

Key Person Mitigation Checklist

Mitigation	Status	Action
All key persons identified	☐
Documentation >80% for all	☐
Backup identified for each	☐
Succession plans in place	☐
Key person insurance	☐
Retention measures active	☐

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