Culture for sceptics: The catalyst for strategy and transformation
For many, it is now generally accepted that culture plays a critical role in how risk is managed across an entity. However, many people remain sceptical of something as intangible as culture - and more importantly do not know how to understand and actively influence mindsets and behaviours across the organisation. In Australia the importance of risk culture has been the focus of a number of speeches and presentations by various regulators which has culminated in APRA reinforcing the importance of Risk Culture in new proposed Prudential Regulations for Financial Services institutions.
This article explores this concept of culture in the context of executing strategy and managing risk, while building a case for organisations to understand their current risk culture before undertaking a transformation of risk management capabilities. We explore how organisations can attain a competitive advantage when people across their entire business (the three lines of defence) can understand what acceptable and unacceptable attitudes are to risks they are exposed to in their day to day roles even when no guidance is provided by policies and procedures.