HOW DO YOU DEFINE GOOD RISK CULTURE?

Before we consider the definition of good risk culture, let’s try and define culture. Culture is what people do repeatedly when no one is watching. Risk culture is a set of entrenched and acceptable behaviors, discussions, decisions, and attitudes towards taking and managing risks within an institution.

Risk appetite is governed by the culture within which an organization operates. It reflects the shared values, goals, practices, and reinforcement mechanisms that embed risk into an organization’s decision-making process, and how well risk management

is integrated within operations. Risk culture is reflected in how people within an organization behave and their attitudes towards risks and risk taking.

Finally, from a definition standpoint, even if policies, risk appetite frameworks, governance structures, whistleblower systems, and risk management training are in place, malpractice and negligence can still happen if the organizational culture does not support adequate risk taking.

HOW DO YOU DEFINE GOOD RISK CULTURE?

Before we consider the definition of good risk culture, let’s try and define culture. Culture is what people do repeatedly when no one is watching. Risk culture is a set of entrenched and acceptable behaviors, discussions, decisions, and attitudes towards taking and managing risks within an institution.

Risk appetite is governed by the culture within which an organization operates. It reflects the shared values, goals, practices, and reinforcement mechanisms that embed risk into an organization’s decision-making process, and how well risk management

is integrated within operations. Risk culture is reflected in how people within an organization behave and their attitudes towards risks and risk taking.

Finally, from a definition standpoint, even if policies, risk appetite frameworks, governance structures, whistleblower systems, and risk management training are in place, malpractice and negligence can still happen if the organizational culture does not support adequate risk taking.

HOW DO YOU DEFINE GOOD RISK CULTURE?

Before we consider the definition of good risk culture, let’s try and define culture. Culture is what people do repeatedly when no one is watching. Risk culture is a set of entrenched and acceptable behaviors, discussions, decisions, and attitudes towards taking and managing risks within an institution.

Risk appetite is governed by the culture within which an organization operates. It reflects the shared values, goals, practices, and reinforcement mechanisms that embed risk into an organization’s decision-making process, and how well risk management

is integrated within operations. Risk culture is reflected in how people within an organization behave and their attitudes towards risks and risk taking.

Finally, from a definition standpoint, even if policies, risk appetite frameworks, governance structures, whistleblower systems, and risk management training are in place, malpractice and negligence can still happen if the organizational culture does not support adequate risk taking.

WILL AN ORGANIZATION WITH A GOOD RISK CULTURE PERFORM BETTER THAN AN ORGANIZATION WITH A QUESTIONABLE RISK CULTURE?

 

trading, improper financial advice based on the models created, mis-selling financial products based on model results, avoidance of tax, inaccurate financial and regulatory disclosures, etc.

This then becomes part of an all-encompassing model risk framework,

but it has to be a hierarchical process, sitting under the umbrella architecture of the overall risk assessment.

 

WHAT COULD THE CONTENTS OF A RISK DASHBOARD LOOK LIKE?

A risk dashboard is a comparison of where an organization is now and where it would like to be, including identification of any gaps and remediation steps. It should include a summary of your strategy in terms of growth areas, and priorities regarding existing customers, distribution models, organizational competencies, and establishing the risks of a lack of culture.