By Saba Zahid, Columbia Part-Time Lecturer; Managing Director, Head of Operational Risk, Morgan Stanley Wealth Management
Earlier in my career, I viewed IPOs primarily as corporate milestones, major achievements for companies entering the public markets. Today, after more than two decades in financial services and teaching Enterprise Risk Management at Columbia University, I see them differently. They are windows into investor psychology and changing perceptions of risk.
After several years of relatively quiet IPO activity, high-profile technology companies are once again capturing investor attention and generating excitement across the market. For many, IPOs are a measure of market health. For risk professionals, they tell a deeper story. They provide insight into how investors, executives, and organizations perceive opportunity and uncertainty.
Risk Appetite vs. Risk Discipline
Over the past 20 years in financial services, I have lived through multiple market cycles. The names, technologies, and headlines change, but certain patterns remain remarkably consistent.
When uncertainty dominates the conversation, investors tend to prioritize stability and preservation. Organizations become more cautious. Capital becomes more selective. Growth initiatives often take a back seat to resilience and risk reduction.
When confidence begins to return, the pendulum swings in the other direction. Investors become more willing to embrace uncertainty in pursuit of future growth. Organizations become more optimistic about expansion and innovation. Capital begins flowing toward opportunity.
Recent technology IPOs have generated significant investor interest, fueling discussion about whether the market is entering a new phase after several quieter years. What I find most interesting is not the companies themselves, but what the renewed enthusiasm reveals about how investors are thinking.
One lesson that has stayed with me throughout my career is that risk appetite and risk discipline are two very different things.
Healthy risk appetite is essential. Innovation, investment, and long-term growth all require organizations to take calculated risks. But risk discipline is what keeps decision-making grounded when enthusiasm is high. It ensures leaders continue to ask difficult questions, challenge assumptions, and evaluate both opportunities and downside scenarios.
I have seen this dynamic play out repeatedly throughout my career. During periods of optimism, there is often pressure to move faster. Momentum builds. Success stories dominate the conversation. It becomes easier to assume favorable conditions will continue indefinitely.
This is often when risk management adds the greatest value. Contrary to popular belief, the role of risk management is not to slow progress or discourage innovation. It is to provide perspective. It is to help organizations pursue opportunity with a clear understanding of both the potential rewards and the potential risks.
The Market’s Lessons for Risk Managers
In the classroom, I often encourage students to look beyond the headlines and focus on the underlying drivers of risk. An IPO may appear to be a capital markets event, but it also reflects broader themes that are central to Enterprise Risk Management: uncertainty, decision-making, confidence, and human behavior. These are the conversations that make ERM such a fascinating field to teach because they connect theory with what is happening in real time.
The return of IPO activity is more than a capital markets story. It is a reflection of confidence, optimism, and the willingness of investors to embrace uncertainty in pursuit of future opportunity.
For risk professionals, these moments provide valuable lessons. Market narratives evolve, but the foundations of sound risk management remain remarkably consistent. Strong governance, healthy challenge, thoughtful decision-making, and leadership judgment matter in every environment.
Markets are ultimately driven by people. Technologies change. Business models evolve. New opportunities emerge. But the challenge of balancing optimism with discipline remains constant. For leaders, the challenge is not deciding whether to take risk, but ensuring it is understood, deliberate, and aligned with the organization’s objectives. That balance is what makes Enterprise Risk Management both challenging and endlessly relevant, and one of the reasons I continue to enjoy practicing it and teaching it.
Views and opinions expressed here are those of the author, and do not necessarily reflect the official position of Columbia University School of Professional Studies or Columbia University.
About the Program
The Master of Science in Enterprise Risk Management (ERM) program at Columbia University prepares graduates to inform better risk-reward decisions by providing a complete, robust, and integrated picture of both upside and downside volatility across an entire enterprise. For both the full-time and part-time options, students may take all their courses on Columbia’s New York City campus or choose the synchronous online class experience.
Learn more about the program here.
