Culture and Awareness
This chapter explores the challenges of bringing about successful culture change that supports an effective operational risk framework. It considers planning, marketing and communication, training, and sponsorship. In addition, this chapter investigates the “use test” requirements of operational risk regulation and explores how activities that change the culture can contribute to meeting the required standards.
WINNING OVER THE FIRM
With a strong governance structure in place, an operational risk function can turn to the important next step: winning over the organization. The time invested in culture and awareness activities is indicative of the likely success of the framework. To be successful, operational risk must be identified, assessed, monitored, controlled, and mitigated across the firm, and this can be achieved only through an energized organizational change program.
The operational risk framework must be designed to reflect the culture of the firm. An approach that is a roaring success in one firm will fall flat in another. Even the best-designed framework needs to be promoted and communicated in order for operational risk management to be adopted and applied throughout the organization. To achieve this, the operational risk function should undertake three important activities—marketing, planning, and training—before it attempts to implement the other elements of the framework.
The role of culture and awareness in underpinning a sound operational ...