APRA today released the results of a survey of how Australian ADI’s (i.e. “banks” for anyone reading outside Australia) believe they are doing on the question of risk culture.
What I found most interesting was the gap between what the executives believe and what the people on the front line believe as reflected in these two charts
Creating an environment in which people truely feel safe to speak up is hard but it does appear that there is a lot more work to do. The first book that comes to mind when I read about risk culture is Creativity, Inc which explores (amongst other things) how Pixar institutionalised “Candour” into the business. Michael Mauboussin’s “The Success Equation” and Greg Ip’s “Foolproof” are also useful guides for avoiding hubris and general overconfidence in your risk management process.
I have to say that the challenge of speaking up is one that resonates with me from my time in the front line and it appears that there is still more to do. Personally I quite liked Pixar’s “brains trust” solution.
Tony – From the Outside