Corporate Culture
Glossary
Risk culture
The social and organisational determinants of individual risky decisions. Some organisations foster high risk cultures e.g. financial trading firms. Others will favour a more conservative culture e.g. regulators.An organisation’s corporate culture is often shaped by its appetite for risk (i.e. culture of risk). To manage risk effectively, everyone within the organisation is obliged to respond to risk by making decisions that are aligned with the organisation’s risk appetite.
Many economists and commentators have noted that the 2008 credit crisis was precipitated by financial organisations where key individuals were ignorant of the risks they are handling and were motivated by personal reward schemes that did not reflect the risks the organisation was bearing.
Oxford Risk Rating profiles allow you to identify people who share your organisation’s appetite for risk, and are thus more likely to fit within your corporate culture. This reduces employee turnover, improves efficiency, and helps lower the costs associated with recruitment and selection.