Risk culture has changed for the better, said ACCA recently when releasing results of a survey.
According to the accountancy body, 57% of respondents said risk culture has changed for the better since the pandemic.
ACCA said it collaborated with The Association of Insurance and Risk Managers (Airmic) and the Professional Risk Managers’ International Association (PRMIA) in this study that gauges how risk and financial leaders are dealing with risk culture and to what extent they understand its effect on the organisation’s broader strategy.
The report incorporates insights from over 2,000 risk and financial professionals around the world while the online survey took place in October 2022 and attracted 1,823 individual responses from risk and financial professionals globally, across a range of industries, ACCA noted.
The study found that while 'box ticking' is prevalent, there is growing interest in risk culture to cope with disconnected organisational cultures and hard-to-detect breadth of risks, ACCA pointed out.
Survey highlights: Key risk priorities
- Key risk priorities for risk and finance professionals across all regions were ‘regulatory, compliance and risk’ followed by ‘technology, data, cybersecurity’ and ‘economic inflation and recession’.
- Sector-specific results showed respondents in financial services were more likely to raise ‘technology, data and cybersecurity’ and ‘regulatory, compliance and legal’ as their two highest risk priorities, whereas those in the corporate sector ranked ‘logistics and supply chain’ issues as one of their top three risk concerns.
- Despite a rise in corporate fraud cases, the corporate sector ranked ‘misconduct, fraud and reputational damage’ lower than any other sector.
- Some of the overarching concerns coming out of the report are that risk conversations continue to happen in a vacuum at the top of organisations, and that engagement not only between boards and senior management — but also across functions and roles — needs significant improving.
According to ACCA, there are 10 calls-to-action regarding risk culture.
- Empower risk leaders to drive risk culture and influence behaviours.
- Resist the danger of tunnel vision when faced with a multitude of risks.
- Understand the behaviours driving both good and bad outcomes.
- Don’t mistake a ‘tick the box’ compliance approach as true, value-added risk management.
- Consider how you define the role of accountants in risk culture, particularly on reconciling ethics with profits.
- Define risk appetite clearly and communicate its purpose to help guide behaviour and inform better decision making.
- Eliminate the fear factor by creating a ‘hands up’ culture through visibility and leading by example.
- Measure and incentivise the risk culture you want by ensuring ‘everyone owns it’.
- Promote good governance through role clarity and knowing who is responsible and accountable for what.
- Coordinate multi-stakeholder engagement with regulators leading to more positive, pro-society outcomes.