Corporate culture key to risk management

CHIEF RISK Officers across Australia see company culture rather than regulatory compliance as the impetus for future risk management development, according to a recent report

CHIEF RISK Officers across Australia see company culture rather than regulatory compliance as the impetus for future risk management development, according to a recent report.

Business leaders understand that risk is important but want to return their efforts to driving the business, and having it culturally embedded gives them a level of comfort that the appropriate controls are in place.

“Boards and executives are beginning to explore ways this can be achieved including linking risk management to performance measurements and existing processes,” said Maurice Pagnozzi, KPMG partner in charge for enterprise risk management services, Asia Pacific.

“The ultimate goal is for risk management to become a self-driven cultural construct that no longer needs to be imposed from the top.”

The KPMG report found that establishing a common way for articulating and prioritising risk across the business instead of in silos was a benefit commonly cited by Chief Risk Officers.

“Other benefits cited included improvement in capital expenditure, financial controls, disclosures, M&A activity and internal audit quality,”Pagnozzi said.

“While compliance has been the kick-start, the drive for change must come from within.”

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