IRM Issues Guidance on Risk Culture

The Institute of Risk Management (IRM) has issued two guidance documents on the highly topical subject of risk culture.

From BP to Barclays and from G4S to Kodak, the root cause of corporate meltdown is increasingly identified as problems with risk culture. The industry has more regulations, standards, codes and governance than ever before, but, while important, these are clearly not sufficient to ensure that the actual behaviour of individuals and teams is fully aligned with the organisation’s desired approach to risk.

An international group of IRM members has been leading a nine-month project to produce:

• A short guidance document aimed at boards who want to understand the issues surrounding risk culture within their organisation.
• A detailed resource document for risk practitioners setting out the background research and some practical models, tools and techniques that can usefully be applied.

Alex Hindson, IRM director and leader of the risk culture project, said: “Risk culture is the missing link in the successful implementation of enterprise risk management- as well as having the rules, processes and policies in place we need to understand and influence people’s behaviour. We have identified certain key aspects of risk culture that all organisations need to understand and address as part of their risk management approach. This practical piece of work is not the last word on the subject but hopefully will be useful to risk professionals and policymakers considering the need for cultural change.”

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