Organizational risk culture is the term describing the values, beliefs, knowledge, attitudes and understanding about risk shared by a group of people with a common purpose. Organizationalrisk culture influences how the organization identifies, assesses, and manages risks, and how it aligns its risk appetite and tolerance with its objectives and strategies1.
The best indication of a mature organizational risk culture is that risk owners understand and accept accountability for risk, because it means that the organization:
Clearly defines and assigns the roles and responsibilities of the risk owners, who are the individuals or groups who have the authority and ability to manage the risks within their scope or domain
Empowers and supports the risk owners to perform their risk management duties, such as identifying, assessing, responding, monitoring, and reporting the risks
Holds the risk owners accountable for the outcomes and consequences of the risks, and evaluates their performance and compliance with the risk policies, standards, and procedures
Encourages and rewards the risk owners for demonstrating risk awareness and competence, and for contributing to the risk management improvement and learning23
The other options are not the best indications of a mature organizational risk culture, but rather some of the elements or aspects of it. Corporate risk appetite is the amount and type of risk that the organization is willing to accept in order to achieve its objectives. Corporate risk appetite is communicated to staff members to guide their risk decision making and behavior, and to ensure the consistency and alignment of the risk taking and tolerance across the organization. Risk policy is the document that establishes the principles, framework, and process for managing the risks within the organization. Risk policy is published and acknowledged by employees to ensure their awareness and compliance with the risk management expectations and requirements. Management is the group of individuals who have the authority and responsibility to direct and control the organization’s activities and resources. Management encourages the reporting of policy breaches to ensure the transparency and accountability of the risk management performance and outcomes, and to identify and address the risk management issues and gaps4. References =
Risk culture - Institute of Risk Management
Risk Owner - ISACA
Taking control of organizational risk culture | McKinsey
[CRISC Review Manual, 7th Edition]
