Why Building A Positive Risk-Aware Culture Matters For Your Business

Resolver
October 3, 2023 · READ

Much like a team sport where every player’s accountability, communication, and collaboration help to win a game, in a positive risk-aware culture, every employee has a role to play in managing risk. Achieving an organization’s goals requires a shared understanding of how to prepare for and mitigate risks and identify hidden opportunities in each risk.

Fostering your risk culture also requires an environment where employees feel comfortable reporting potential risks or issues. Providing the right tools to capture those risks, issues, and incidents and then create action plans for them takes your culture one step further.

As Resolver’s Director of Product (GRC), Ryan Napoleone, revealed during his appearance on the Global Risk Community podcast, building a risk-aware culture that empowers all employees to participate in risk management activities and seeing the benefits in doing so makes all the difference. “Cultivating a strong culture is key, as it nurtures a sense of responsibility and accountability for risks across the board,” adding that it’s not a venture that lives solely within the risk team. Providing centralized and accessible tools for reporting, measuring, and tracking risk management activities helps you get there. “[At Resolver,] we aim to empower individuals to proactively identify, assess, and mitigate risks, contributing to a more robust overall risk management program.”

In this article, we’ll cover the benefits of risk awareness in the workplace and how it can lead to innovation and progress in an environment where every team member plays a crucial role.

Risk culture’s role in improving risk management

If you’re new to “risk culture,” it’s defined as the collective set of values, beliefs, and attitudes within an organization that govern how it perceives and manages risks. Your risk culture (or lack of it) significantly influences your workplace’s approach to risks, decision-making, and employee behavior.

Organizations with a positive risk-aware culture take a unified and holistic approach to managing governance, risk management, and compliance functions within their business. Teams benefit from integrating various aspects of these disciplines into a cohesive framework, reducing silos, and improving communication across disciplines. Maturing your risk culture to meet your growing organizational needs often involves using technology, such as cloud-based GRC software, and optimized workflows to streamline and optimize these functions and their processes.

Napoleone advises that nurturing a risk-aware culture supports well-informed decision-making. “This means integrating risk considerations into processes and strategic decisions, thus enabling better-informed choices.” This approach lays the foundation for a systematic, organized, and collaborative approach to risk management, enabling organizations to assess the interconnectedness of risks and their cumulative impact on business objectives.

Benefits of a positive risk-aware culture

“Establishing risk awareness, nurturing open communication, and fostering a culture of continuous improvement are the cornerstones of our approach to risk,” Napoleone explains. An organization with a positive risk culture can navigate uncertainties more effectively through:

  1. Improved agility: A positive risk-aware culture encourages employees to embrace change and explore new opportunities. This adaptability equips organizations to navigate evolving markets, technologies, and customer preferences.
  2. Increased engagement: Employees take ownership of their work and decisions, leading to more prudent decision-making and risk management.
  3. Efficient resource allocation: Positive risk culture streamlines resource allocation by identifying redundant processes and duplication of effort, directing resources toward critical risks and compliance needs instead.
  4. Compliance adherence: Enhanced risk awareness helps organizations stay updated on compliance changes easily so they can more consistently apply policies and controls, reducing the risk of non-compliance.

Also read: Building a Culture of Compliance

Technology’s role in helping you build your risk culture

Building risk awareness in your workplace requires careful attention to ensure healthy growth and resilience. It means ensuring your toolset can scale with your organization as it matures. Making it easy for employees to be risk-aware and communicate issues transparently and interdepartmentally can mean the difference between embracing risk and compliance asks and avoiding them. Investing in an integrated risk management solution can be a game-changer for organizations committed to driving innovation quickly while looking out for potential threats to the business.

As Napoleone states, “functions like second-line internal control, financial reporting, and regulatory compliance can significantly benefit from this approach, particularly in the realm of ICFR (Internal Control over Financial Reporting).” Key features of an integrated risk management solution can help shape this culture, promoting proactive risk and compliance management and transparent decision-making.

  • Centralized data and information: A single, reliable source for risk-related data, policies, controls, and compliance requirements ensures consistency and transparency.
  • Real-time monitoring and reporting: Swiftly identify emerging risks and compliance issues, enabling timely responses and effective mitigation.
  • Risk assessment and prioritization: Focus efforts on the most critical risks by assessing likelihood and impact and optimizing resource allocation.
  • Document management and collaboration tools: Facilitate secure sharing of risk-related documents, policies, and procedures among stakeholders.
  • Dashboard and reporting solutions: Provide real-time insights into key risk indicators and performance metrics, supporting informed decision-making.

These components collectively contribute to a proactive risk management approach and enhance transparency in organizational decision-making, fostering a thriving risk-aware culture.

Read: Understanding Inherent vs. Residual Risk Assessments: Safeguarding Your Organization’s Future

How Resolver’s ERM application can help you achieve a positive risk culture

With its comprehensive suite of features and capabilities, Resolver’s ERM application equips your organization with the necessary tools to cultivate a culture where risk management is not just a practice but a way of life.

By centralizing risk-related data, Resolver’s ERM application simplifies the complex landscape of risk management, providing a unified platform for tracking and managing risks consistently. Our customizable risk frameworks allow organizations to tailor the application to their unique risk management processes, ensuring relevance and effectiveness.

With Resolver’s ERM application, you’re not just managing risks; you’re cultivating a culture where every team member contributes to the organization’s adaptability, accountability, and long-term success. Ready to build a positive risk culture and manage risks more effectively? Contact us to schedule a demo of Resolver’s ERM application today!

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