Developing A Risk Culture

Known globally as The Risk Doctor, David has been working in risk management for about 30 years. He has worked in 48 countries on every continent except the Antarctic (too cold!), with clients in most industries.

  Risk Management   ProjectsAtWork  

The most important contributor to successful risk management isn’t processes or tools, which are important, but an organizational culture that is risk-aware and encourages people to take the right risks. This can be achieved by addressing cultural aspects up front or allowing it to emerge naturally by putting a supportive infrastructure in place first.

Several things help to make risk management work. These include a risk process that is simple and scalable, which can be applied across the organization to manage all types of risk. We also need competent people, with the knowledge, skills and experience to deal with the risks that might arise. Infrastructure is also important, providing the tools to support risk management and handle significant amounts of risk data.

But the most important contributor is the culture of the organization, which provides the context for risk management at all levels. The ideal culture is risk-aware, encouraging people to take the right risks, and rewarding good risk management.

So how can an organization develop a strong and mature risk culture? Two approaches are possible:

Culture first

One possibility is to start at the top, addressing cultural aspects directly. This requires a clear statement of intent from leaders in the organization, laying out their vision and policy for risk management. They should describe their values …

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