Mastering Risk Management

CULTURE AND RISK CULTURE

This is a book about risk management. The question therefore is whether there is something different between a firm’s culture, the beginning of this chapter, and risk culture. Fundamentally, risk culture uses the system of values and behaviours of the firm when it makes risk decisions or when it identifies, assesses, discusses and acts on the risks of the firm.

Risk culture reflects an awareness of risk throughout the firm, but it is one of the values of the firm, not something different which happens only in the risk function. After all, a culture of risk management would be too narrow if it only looks at risk-taking attitudes of the firm and individuals. Regulating for ‘risk culture’ would imply that the risk-taking ...