Set and instil the right culture throughout the organisation

Overview & Purpose

What This Standard Covers

This Standard focuses on the governing body's role in establishing a culture conducive to effective risk management within an organization, emphasizing decision making, transparency, integrity, and clear accountability.

Performance Criteria

• Formulate and establish the organization’s risk culture
• Promote transparency and clear lines of accountability
• Integrate risk management into decision making processes of the governing body
• Foster a culture emphasizing integrity and ethical behavior
• Embed risk management and internal controls in the organization’s activities
• Align incentives with strategy and risk appetite/tolerance
• Define appropriate structures and frameworks for the organization
• Establish an approach to disclosure and transparency

Knowledge & Understanding Requirements

• Understand the definition of risk culture and associated risks
• Recognize the organization's attitude toward risk appetite and tolerance
• Grasp how decision-making processes consider risk and stakeholder issues
• Embed transparency in risk management and encourage whistleblowing
• Value the importance of clear accountability
• Appreciate diverse perspectives and the use of specialist input
• Promote integrity and ethical behavior through leadership and communication
• Understand the behavioral impact of incentives on risk management
• Create appropriate structures and frameworks to support risk management
• Ensure decision-makers recognize risk exposure limits
• Verify that adequate resources and competencies are allocated for risk management
• Distinguish between risk management and risk oversight
• Address risk events openly and align responses with the culture

Relevent Roles

• Managers and Senior Officials
• Directors and Chief Executives of Major Organizations
• Senior Officials of Special Interest Organizations
• Finance Managers and Chartered Secretaries
• Personnel, Training, and Industrial Relations Managers
• Chartered and Certified Accountants
• Management Accountants
• Company Secretaries