{"id":1272,"date":"2012-12-11T13:26:03","date_gmt":"2012-12-11T13:26:03","guid":{"rendered":"http:\/\/www.chaordicsolutions.co.uk\/blog\/?p=1272"},"modified":"2012-12-11T14:06:54","modified_gmt":"2012-12-11T14:06:54","slug":"cultural-health-check-could-prevent-corporate-meltdowns","status":"publish","type":"post","link":"https:\/\/www.chaordicsolutions.co.uk\/blog\/from-our-risk-management-consultants\/cultural-health-check-could-prevent-corporate-meltdowns\/","title":{"rendered":"Cultural health check could prevent corporate meltdowns"},"content":{"rendered":"

\"\"<\/a>Cultural health check could prevent corporate meltdowns: risk culture is missing link in most organisations.<\/p>\n

 <\/p>\n

Extract from Institute of Risk Management (IRM) – Press Release:<\/strong><\/p>\n

Organisations should personality-test their workers in order to avoid scandals and<\/em> disasters such as Libor rate-fixing and the Gulf of Mexico oil spill, according to<\/em> guidance issued recently by the Institute of Risk Management (IRM).<\/em><\/p>\n

Key staff should undergo psychometric testing in order to gauge an organisation\u2019s<\/em> \u2018health\u2019 and prevent or mitigate corporate meltdowns, IRM\u2019s risk culture guidance <\/em>said. It blamed flawed risk cultures for international scandals and disasters such as <\/em>Libor-fixing, Deepwater Horizon, Enron\u2019s collapse, the closure of the News of the <\/em>World and abuse of MPs expenses.<\/em><\/p>\n

\u201cAirline pilots are routinely given personality tests to determine how effectively they<\/em> can exhibit self-control under stress \u2013 we should be ready to look at other key staff, <\/em>managers and board members in the same way\u201d, the guidance said.<\/em><\/p>\n

The two documents, Risk culture: resources for practitioners, and Risk culture: under<\/em> the microscope \u2013 guidance for boards, follow nine months of research and <\/em>consultation with international risk experts on the root causes of organisational <\/em>underperformance.<\/em>
\nThey offer guidance and resources to help organisations better understand cultural<\/em> issues and move towards successful examples such as the John Lewis Partnership, <\/em>the Co-Op, UPS and Semco.<\/em><\/p>\n

In order to move from a vicious to virtuous cultural cycle, remuneration and risktaking<\/em> should be linked, with those who take inappropriate risks being sanctioned and <\/em>those who choose smart risks rewarded.<\/em><\/p>\n

\u201cHistorically, remuneration and risk management policies have not been aligned. The<\/em> banking sector demonstrated the effect of incentivising staff to take significant risks to <\/em>secure high returns without due consideration of the impact on balance sheet and <\/em>long term reputation,\u201d the guidance stated.<\/em><\/p>\n

Backed as \u201cthe definitive guide\u201d to risk culture by the Business Continuity Institute<\/em> (BCI) and described as \u201cgroundbreaking\u201d by the Association of Chartered Certified <\/em>Accountants (ACCA), the research has the backing of the Federation of European <\/em>Risk Management Associations (FERMA) and the European Institute of Governance <\/em>Awards.<\/em><\/p>\n

Alex Hindson, an IRM director and project leader, said that risk culture was \u201cthe<\/em> missing link\u201d for organisations, adding: \u201cWe have identified certain key aspects of risk <\/em>culture that organisations need to understand and address as part of their risk <\/em>management approach.\u201d<\/em><\/p>\n

More …<\/strong> http:\/\/www.theirm.org\/RiskCulture.html<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

Cultural health check could prevent corporate meltdowns: risk culture is missing link in most organisations.  <\/p>\n","protected":false},"author":1,"featured_media":36,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":[],"categories":[23],"tags":[29,27,28,30,92,36,39,37,38],"_links":{"self":[{"href":"https:\/\/www.chaordicsolutions.co.uk\/blog\/wp-json\/wp\/v2\/posts\/1272"}],"collection":[{"href":"https:\/\/www.chaordicsolutions.co.uk\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.chaordicsolutions.co.uk\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.chaordicsolutions.co.uk\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.chaordicsolutions.co.uk\/blog\/wp-json\/wp\/v2\/comments?post=1272"}],"version-history":[{"count":10,"href":"https:\/\/www.chaordicsolutions.co.uk\/blog\/wp-json\/wp\/v2\/posts\/1272\/revisions"}],"predecessor-version":[{"id":1280,"href":"https:\/\/www.chaordicsolutions.co.uk\/blog\/wp-json\/wp\/v2\/posts\/1272\/revisions\/1280"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.chaordicsolutions.co.uk\/blog\/wp-json\/wp\/v2\/media\/36"}],"wp:attachment":[{"href":"https:\/\/www.chaordicsolutions.co.uk\/blog\/wp-json\/wp\/v2\/media?parent=1272"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.chaordicsolutions.co.uk\/blog\/wp-json\/wp\/v2\/categories?post=1272"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.chaordicsolutions.co.uk\/blog\/wp-json\/wp\/v2\/tags?post=1272"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}