According to Warren Buffet, ‘’Culture, more than rule books, determines how an organisation behaves’’.
Culture is the soul of the organization — the beliefs and values, and how they are manifested. The structure is the skeleton and the process is the flesh and blood.
And culture is the soul that holds the thing together and gives it life force. The prevailing risk culture within an organization can make it significantly better or worse at managing these risks, it also significantly affects the organizational capability to take strategic risk decisions and deliver on performance promises.
Risk culture arises from the repeated behaviours of the employees of the organisation. These behaviours are shaped by the underlying values, beliefs and attitudes of individuals, which are partly inherent; and by the existing corporate culture in the organisation.
Risk culture building is the training of mind, of heart and of personal character to respond effectively to any situation of risk and take the right decision to mitigate, control or optimize risk to the advantage of the organisation.
Negligent, reckless, and improper behavior can materially undermine company performance, as manifest in customer backlash, burgeoning litigation costs and penalties, and lasting reputational damage.
Inadequate risk cultures are often characterized by performance complacency or the normalization of unwelcome incidents. Problems often germinate during times of organizational stress, when new pressures divert attention from business-as-usual risks.
A strong risk culture provides three key benefits: it can help mitigate exposures from increasingly complex operational practices; it can enhance workplace productivity; and it can avert mishaps that may have far-reaching consequences.
A mature risk culture is present when personnel at all levels routinely anticipate risks and report issues of concern, look out for each other and the firm, and respond to evolving opportunities and threats in line with corporate risk goals
- Understand what we mean by “Risk culture”
- Identify appropriate methods and strategies for identifying, measuring, monitoring and improving risk culture in the workplace
- Understand where risk culture sits in an overall risk framework
- Develop strategies to identify and measure risk culture
- Appreciate the importance of ensuring that good risk culture is embedded into your company strategies
- Appreciate how digitization can help to manage risk culture
- Appreciate the emergence of RegTech as a risk management tool whilst recognizing its limitations
- How risk culture can affect risk taking and risk management in your organisation.
- The perils and pitfalls of assessing risk culture using survey tools.
- Monitoring risk culture using metrics.
- Practical techniques that can be used to change your risk culture.
- The experiences of other financial institutions using two real-world case studies
Understanding the depths of risk culture
- What is risk culture? Artifacts, Beliefs and Underlying Assumptions
- Risk sub-cultures
- The relationship between risk culture and risk management (bank case study)
Assessing and monitoring risk culture
- Designing and using risk culture surveys
- The perils and pitfalls of risk culture surveys: insurance case study
- Selecting risk culture metrics
Controlling risk culture
- Tone from the top
- Training and education
- The role of the risk function
- The relationship between risk culture and the risk management process
- Return to bank case study