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Towards a 3-D model of risk management: Why is the current focus on culture, conduct and senior management having so little impact?
Journal of Risk Management in Financial Institutions,
9
(4),
363-372
(2016)
Abstract
Since 2008, regulators and risk professionals have recognised that culture and senior manager behaviour are critical drivers of fair treatment of customers and effective risk management. However, despite this recognition, cultures are slow to change, and regulatory and risk management failures at financial institutions continue. This paper argues that the paradigms adopted by regulators and risk professionals in addressing culture are flawed and that the rationalist, pseudo-scientific approach that underlies most risk management cannot control these fluid, sometimes chaotic and always complex factors. We identify some key indicators of effective cultures and highlight the challenges to risk departments, which must become expert in assessing organisational learning, management decision making and future thinking.
Keywords: risk management; culture; conduct; regulation; banking; finance
The full article is available to subscribers to the journal.
Author's Biography
Gary J. Storer is CEO and Founder of Enterprise Learning Ltd, an award winning consultancy specialising in conduct risk. With over 25 years working in regulated financial services, Gary combines experience in risk management and regulation with a background in human resources (HR), organisation development and change, as well as senior manager education and coaching. Before setting up Enterprise Learning, he held senior roles at KPMG, NatWest plc and Legal & General. He advises senior managers on risk management, culture and behaviour change and governance, as well as regulated business transformations. Clients include institutions such as RBS, Lloyds Banking Group, Capita, Prudential, Legal & General, Cooperative Bank, as well as the Financial Conduct Authority and the UK Investment Association. He was educated at Cambridge University, holds an MBA and is currently studying for a Masters in Executive Coaching with Ashridge Business School. He is also a Member of the Chartered Institute of Personnel and Development.
Citation
Storer, Gary J. (2016, October 1). Towards a 3-D model of risk management: Why is the current focus on culture, conduct and senior management having so little impact?. In the Journal of Risk Management in Financial Institutions, Volume 9, Issue 4. https://doi.org/10.69554/QPEJ9162.
© Henry Stewart
Publications LLP
Publications LLP