Preparing for a Data Breach: 6 Steps Your Company Can Take Today
It’s not a matter of if, but when. This has become a common refrain in the world of information security, and for good reason. The…
An effective risk culture is one that allows and encourages individuals and departments to take risks in an educated and confident manner. When separating companies based on their risk culture, you will find two types of companies:
Rather, they spend the majority of their time managing risks, working towards achieving compliance, and staying on track and task. Managers of these companies are often not given the autonomy to look beyond their specific duties and siloed departments. Usually, these managers are fine with the status-quo and over time this culture creates an environment where change will not happen unless they have faced regulatory criticism or have been reprimanded for sub-par practices.
Creating a culture of risk is a step towards progress and innovation. While not easy or quickly done, it will improve every aspect of an organization.
All employees are educated on the various risks that could impact their jobs. If a risk is identified, any employee can assess the risk and quickly notify management, executives, board of directors, and any other individual or group impacted, so that action can be put in place to mitigate or respond to the risk.
This company’s board of directors are very informed on the potential risks and risk appetite of the company and ensures that executives and managers understand and buy-in to the importance of risk awareness and prevention.
An effective risk culture is essential to the overall success of the risk management process. An abstract from ERM Initiative Faculty, 2014 stated that effective risk cultures do the following three things:
When organizations have not created a culture of risk, decisions are often made that are not in line with company policies and procedures. According to The Institute of Risk Management’s paper, Under The Microscope: Guidance for Boards, “organisations with inappropriate risk cultures will inadvertently find themselves allowing activities that are totally at odds with stated policies and procedures or operating completely outside these policies. An inappropriate risk culture means not only that certain individuals or teams will undertake these activities but that the rest of the organisation ignores, condones or does not see what is going on. At best this will hamper the achievement of strategic, tactical and operational goals. At worst it will lead to serious reputational and financial damage.”
The key to successfully creating a culture of risk is patience. Often, changing a climate and culture of any sized organization is a two to three year process. This is not the type of change that occurs during one board meeting, memo, or staff meeting. It takes time to educate the organization properly and for leaders to demonstrate the importance of the change.
You know that you have successfully created a good risk culture if your organization resembles these 10 character traits:
LogicGate’s Enterprise Risk Management platform is a robust and agile system that automates your risk management processes across the organization. When changing an entire organization’s culture, it’s helpful to have tools in place that will increase risk visibility for every employee. Implementing a tool such as LogicGate that defines potential risks associated with activities and allows stakeholders across the organization to rate risk dimensions, emphasizes the organization’s desire for a good risk culture. With LogicGate in place, you will empower every level of your organization to embody a culture of risk by providing them with an easy to use, agile and centralized platform for managing risks.All posts
Tune in Thursday to hear LogicGate's very own Jon Siegler offer some sage wisdom on how companies can survive a data breach. Presented by ITGRC…
What’s next for the governance, risk, and compliance space in 2019? Take a look at our predictions for the year ahead.