How does your risk culture affect your risk management?

In my opinion risk culture plays a crucial role in shaping risk management practices within an organization. A strong risk culture fosters awareness, accountability, and proactive risk mitigation strategies among employees, resulting in more effective risk management. Conversely, a weak or toxic risk culture can lead to negligence, complacency, and poor decision-making regarding risks, increasing the likelihood of adverse events and their impact on the organization which might lead to liabilities.

I appreciate what you’re saying, but struggle to understand your terms “negative” or “positive” risk culture. Risk is real. It can be unseen, under appreciated, ignored, mitigated, managed, feared, respected… Positive or negative doesn’t mean much for me when thinking about risk. We work with risk everyday. What we should aim for (in my view) is to make sure that the presence of risk is known, the potential and likely consequences are understood, that mitigations are appropriate, and that management makes decisions with all of that front of mind.

A positive risk culture is one that views decisions as trade-offs rather than solutions: risk is about balancing reward against risk. Risk can be ranked as a combination of likelihood and impact. Then they can be accepted, mitigated, or transferred. Unknowns should be watchlisted (as these may come to manifest at some point). The discipline associated with documenting risks builds decision-making confidence. Underpinning all of this is a culture of openness that enables people at all levels to speak their mind. Without senior leadership exhibiting behaviours that permit this, key risks may not surface to them and increase the underlying risk of the organization.

Culture is a dominant factor if negative that can ruin the organisation efforts towards growth and sustainability, it is a risk should be anticipated and proactively avoided by many majors.

In my opinion we do not need to separate" risk culture" and "culture". A strong culture helps in mitigating many risks on its own. Rest are tackled through robust business processes

Imagine: 1. A team of engineers is afraid to report a mistake in their design, eventually leads to a product recall. 2. A sales team is afraid to try new segment, potential loss of revenue in millions. These cases show a negative risk culture, it can be bad for a company resulting into employees afraid to make mistakes or take risks & less likely to come up with new ideas or try new things. In a negative risk culture, employees may be constantly worried about getting blamed. This can make them focus on following rules and avoiding mistakes. This can lead to a rigid and process-bound work culture. Such an environment can have a significant negative impact first on people and the company's success.

When assessing hazards & risks you're management skills are to keep things simple but safe and secure ,don't complicate the process with technical mitigation where a simple logical answer is there infront of you don't look for engineering fixes when a barrier or warning signs will do,sometimes somethings are obvious to us but we can't see them these are what catches many people out there see the big picture and are focused only on that not the little things that should of been risk assessed accordingly with the full picture.

The existence of a negative risk culture could be compensated in the short term by additional effort to be made by managers and the engagement of external experts. In this case, the risk management dashboard will focus on the most serious risks identified and on targeted points of vigilance. I recommend putting in place a training and communication plan to gradually develop the risk culture. As we move forward, the situation should gradually improve.

A negative risk culture can severely hinder both technological and organizational progress. It creates a stifling environment where proactive approaches to cybersecurity and compliance are overlooked, leaving us vulnerable. It diminishes our ability to meet regulatory standards, jeopardizes patient safety, and inhibits our capacity for innovation in healthcare.

A negative risk culture undermines an organization's capability to effectively navigate challenges and uncertainties. When risks are ignored or concealed, the strategic foundation becomes fragile. The repercussions ripple through, weakening risk governance and oversight, creating potential gaps in understanding, and even pushing the organization beyond its defined risk boundaries. Moreover, disregarding established risk plans and mitigation strategies erodes institutional trust. But the most alarming fallout is the resulting disengaged and demotivated workforce and stakeholders. Proactively identifying and addressing the factors that contribute to a negative risk culture is critical to ensuring resilient and robust risk management.

True risk culture extends beyond the traditional blocking and tackling of policies and procedures. True risk culture is engrained in everyone (driven by senior leaders) and in particular becomes part of the leadership team's mindset everyday, who are assigned measurable tasks to reduce risk as part of their annual goals

You can take calculated risks with mitigation plans. However, if your behavior is to take risks all the time, you may end up with an unexpected situation where you may suffer for good. You have to make the right decision. Your decision has to be properly analyzed considering the probability and severity. This could help to avoid any unwanted incidents in your life.

Assessing risk culture in a specialized healthcare environment involves more than surveys and interviews. Given our compliance requirements and our limited IT resources, it's crucial to have real-time monitoring and periodic audits. We integrate these quantitative data points with qualitative insights from team members to gauge how our risk culture aligns with organizational objectives and regulatory needs. This holistic approach provides a nuanced understanding of our risk culture, helping us adapt and respond effectively.

Trust is essential for a positive risk culture. When people trust each other, they are more likely to communicate openly about risks, share information, and challenge decisions. For example, learning from mistakes can also build trust in one another, improving the organisations ability to manage risks in the future.

Know your industry - from development to retail - to understand where potential risks exist. You can do everything right in one area; run a perfect safety record for example, but overlook things like employee theft or incompetence. When other factors are OK, but problems exist, look at personnel records or interview co-workers to determine if a heavy handed, self entitled manager/supervisor is the issue. Such individuals in a leadership position can destroy worker moral, eliminate efficiency & the effectiveness of the department they are in charge of. Look beyond protocols, rules, regulations & obvious safety/security factors if there are problems. Could be the human factor - the wrong person in the wrong position of leadership.

Organise an away day and engage in a number of team-building exercises such as trust falls, blindfolded obstacle courses and escape rooms. These games can help build trust and strengthen positive risk culture. In these away days you can include simulations, workshops, and discussions. Including follow-op and feedback at the end of the sessions can also ensure that learning has been sustained.

Risk culture starts at the top (Tone at the Top). This is because what is 'important' to the Board will be 'fascinating' to the CEO. When the board prioritizes risk management, the CEO puts measures in place to bring that vision to life. * Comprehensive Education - A well-informed board is better equipped to make informed decisions. * Setting the Standard - When boards establish risk management expectations, this sends a clear message throughout the organization. * Transparent Communication - Open and honest communication about risks, is vital. The board should foster an environment where employees feel comfortable reporting risks without fear of consequence. * Incentivize for a Risk Culture - Reward risk-based thinking and measures.

The key to improving your risk management culture is to keep your risk management processes simple. Unfortunately, many organizations think a formal risk management program is too technical and it is too difficult to implement. In many cases, there is a direct correlation between level of complexity and the effectiveness of risk management processes. As soon as a process becomes too complex or difficult, the level of effectiveness is reduced. If too many processes are involved in the program structure, the higher the probability for error. Failures in designing risk management processes are not risks being left unidentified, but risks not being communicated to the right people early enough to allow a mitigation strategy to be implemented.

Communication of key messages to the key people is crucial in influencing an organization's risk culture. Often a top-down approach would be a strong driver for change as the initial culture was set by top management anyway. Top management needs to be aware how risk culture affects their business decisions in meeting business objectives, align and decide what exaclty is the risk culture the organization needs. Culture being dynamic, will always be changing and reactive to environment and various factors, remember to monitor, re-evaluate, and fine tune to business needs.

Targeted training and robust communication are vital to improve risk culture, especially in a healthcare setting with strict compliance requirements. In my team, we couple these with real-time monitoring tools to track the effectiveness of our risk policies. We aim to align our risk culture with broader organizational goals and regulatory frameworks. Empowering team members to be risk champions promotes accountability and helps fine-tune our risk strategies for better patient outcomes and organizational resilience.

A positive risk culture in a healthcare setting involves more than periodic audits or governance meetings. We've found that real-time risk monitoring, aligned with our compliance frameworks, offers a dynamic view of risk management effectiveness. Additionally, we use lessons from successes and failures to adjust our strategies. Open communication channels between IT, management, and other stakeholders keep everyone engaged and accountable. This ongoing commitment ensures that our risk culture remains integrated into daily operations, setting a standard for compliance and innovation in healthcare delivery.

Align company objectives with risk management so that employees understand that unmitigated risks may impact meeting the objectives. Embed risk management in people’s values, behaviors and annual objectives. Maintain a culture that encourages and rewards risk management and transparency.

The culture needs to be reinforced by every level of leadership and management within the organisation. The tone at the top is critical having their commitment combined with rewards and recognition for team members that take calculated risks that pay off is essential for sustaining a positive risk culture that includes rewards and recognition.

Sustainability of any positive process in a business is essential to long term success. Establishing methods and tracking mechanisms to support a positive risk culture is paramount to any organization. Sustainability is achieved with unquestionable support from leadership through actions, not words. Risk managers have a critical role in convincing the leadership team and board, that proper investment and awareness of a positive risk culture leads to economic benefits and ongoing going top down, risk reduction for the future.

One key point to consider on risk culture is that one size doesn't fit all. For instance a startup with a strong growth momentum will have a different thought process compared to a matured/seasoned organisation. Irrespective, a good risk management practice can help identify the risks and also build mitigation measures based on the strategy and direction of the management.

“Silicon Valley Bank had no official chief risk officer for 8 months while the VC market was spiraling.” Clearly some banks that failed this year had a bad risk culture which resulted in awful risk management and those banks became accidents waiting to happen. Another example is a failed bank where for years risk management was overruled by the business who complained to management and the business always got their way. What is the point of risk management then apart from box ticking? A leveraged company like a bank needs a good risk culture. Lending out money is easy. Getting the money back not so much. Every person at a bank should be well aware of this and underwrite this philosophy!

Risk leaders must go beyond mere flowery risk language and a dashboard tracking KPIs. Risk must be owned by everyone in the organization as risk transcends functional departments. This "risk culture" must be recognized as mission critical from the CEO down, or it will merely be a watered down version of risk management that provides no real value to the organization.

Risk managers should remember that culture is only one of the three conventional dimensions of organizational design. The others are process and structure. A useful culture is pointless unless the process and structure align.

One aspect often overlooked is the scalability of risk culture within smaller teams. A strong risk culture is even more critical in my setting, where the IT department consists of just a couple of personnel. The leanness of the team demands that risk awareness and management be second nature to each member. We've adopted automated tools to manage real-time compliance with frameworks, compensating for the small team size. It's a powerful example of how technology can mitigate and shape risk culture, making it more adaptive and resilient irrespective of the organizational scale.

Risk for me is about people & the way we all feel & think. If we are with it, on the level & healthy & well, there are less risks to everyone working with each other & living & playing with each other. We really don’t need too get technical & fancy about risk , we need to think about each other & look out for each other & think how we can protect anyone we know or don’t know , anyone who is going to live on this earth now & in the future. There are huge opportunities to look out for each other & our friends & families, on all other humans & the land , sea & environment as well & plants & animals of our beautiful planet. Be aware, think ahead & act, commit to care & compassion. Commit to looking & listening & learning to respect life .