Culture is Foundational

Ann Rodriguez and Viney Chadha

It is worth emphasising that culture is the basis of an effective enterprise risk management programme. Without a strong, supportive, transparent and self-critical culture, the value proposition for enterprise risk management will be challenging to realise.

The culture of being thoughtful, unbiased and challenging norms translates directly into the usage and output of KRIs. Challenging norms is critical. People generally have a positive self-view, especially in the way they view the processes, results, risks and controls in their business. They often perceive them as better than they are, and thus have a view that they are safer than they actually are. If your company has a culture that cannot bear having negative information (red) on a report, this may have an impact on how thresholds or triggers are set. If the output is always within expectations, then the value of the indicator is questionable – and perhaps not really a “key” risk indicator.

WHAT IS CULTURE?

Organisational culture encompasses the values and behaviours that contribute to the unique social and psychological environment of an organisation. This includes an organisation’s expectations, experiences