This latest installment of our CRO Series addresses establishing and nurturing a learning culture with regard to risk. Learning is dynamic, ever-evolving, stimulating, and fun, and simply a prudent thing to do when risk is involved. The openness and transparency so necessary to an effective learning environment in managing risk is largely driven by the organization’s risk culture, as there is a circular relationship between the two. Learning in this sense is not confined to individuals, but directed more to the organization.
Building on prior installments of our CRO Series covering the importance of effective board risk oversight and CRO positioning within the organization, this white paper focuses on risk culture because it is a topic in which regulators have a keen interest. Organizational learning is supportive of an effective risk culture that in turn is supportive of effective risk management. Supported by empirical research, this white paper explores such topics as the attributes of successful learning organizations, the importance of risk culture in financial services, challenges in making risk culture actionable, success factors for an effective risk culture, physical and behavioral characteristics of risk culture, a process for strengthening risk culture, and how the CRO can facilitate the development of an effective risk culture.