The Importance of Risk Culture

Too Often, Risk Culture Is an Add-on Instead of a Main Focus

Companies can spend a fortune on risk management procedures, but those protocols are designed to clean up the mess after an incident has already occurred. It would be far more beneficial for companies to adopt a standard for risk culture in order to prevent crises and to be more effective in the event an actual emergency does occur.

Risk culture is an active work model that makes all of a company’s employees part of an automatic response to threat, rather than simply teaching them how to respond in negative situations. Risk culture ideology is far less expensive than risk management, which is designed to respond to a crisis once the worst has happened.

Risk Culture Practices Make Crisis Response Automatic and Autonomous

There are specific expected outcomes from training within a risk culture mindset, but the end result is that employees are active decision makers who are well-schooled in crisis response. These team members move forward autonomously in a given situation in order to minimize widespread damage. By focusing on risk culture rather than risk management, breakdowns in crisis response can be found and addressed in an ongoing way, rather than after the fact.

Risk Management Isn’t Just Lip Service, and Neither Is Risk Culture

In the mindset of risk management, it’s far too easy for employees to become complacent under the mindset that nothing bad will ever happen. Risk management, therefore, has become just another buzz word in the corporate world. But a climate of risk culture within a company means different team members are constantly aware of potential threats and open discussion about those threats keeps employees constantly aware of some of the real-versus-unlikely company dangers.

 

Reference:
http://www.ababj.com/community-banking/c-suite/item/3959-erm-s-frequent-missing-link-a-strong-risk-culture