Risk Culture

This chapter introduces the concept of risk culture, placing it in the context of organizational culture more broadly. The authors draw on experience and research in a range of sectors and settings (including the financial services and retail sectors and safety-critical environments) to illustrate the importance, challenges, and practicalities of managing risk culture. By its nature, risk culture is dynamic and multidimensional—indeed, we find that each organization has its own unique risk culture. To address this challenge, we provide real-world approaches to measuring and understanding risk culture in the context of each unique organization. Though there are no simple “quick fixes” to managing risk culture, specific management levers can be used to shape and influence risk culture. These levers are described and explored, with particular focus on using rewards and incentives, highlighting best practice as well as potential pitfalls.