The Risk Within
First published:
ISBN: 978-1-78272-458-2
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Building a foundation of trust and oversight
Acknowledgements
Introduction
What is psychological safety and how does it impact organisations?
The seven principles of psychological safety in managing risk and uncertainty
Blending transparency, accountability and risk strategy
Empowering teams for effective risk management
Leveraging setbacks for informed risk management
Integrating adaptive and agile risk intelligence with psychological safety
Building a foundation of trust and oversight
Cultivating supportive environments
Organisational maturity assessment
Dealing with multicultural environments
Change management
Establishing the roadmap
Adapting the risk function
Conclusion
A personal ask
Appendix
References
In the absence of psychological safety, risks remain hidden, hindering growth, stifling innovation and potentially threatening your very existence. Embrace psychological safety, and watch your potential unfold.
With US$73 billion of exposures to stock index futures going unnoticed until they turned into a combined loss of US$7.2 billion, Jérôme Kerviel’s “feat” remains the perfect textbook example of monumental risk oversight failure.11 For more detail on Société Générale’s trading scandal involving Jérôme Kerviel in 2008, see BBC News (2008). It wasn’t the first time, or the last, that this has happened. Major issues can happen; organisation culture, and psychological safety, are your best protection.
Reflecting on my time in risk management, I feel there is as an opportunity to rethink what effective risk oversight entails. It should provide the assurance that business threats and vulnerabilities are addressed, and that strategic business objectives can be met. I find that the latter rarely occurs in a meaningful way. This observation also connects to the role of top executives and board directors. The response to the Kerviel crisis from Daniel Bouton, the Société Générale CEO at
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