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Realising that it was spending more and more money on risk management and compliance, without a corresponding reduction in the number of problems it encountered, one leading bank decided to review its organisational culture. It began by assessing its existing internal audit procedures to see what, if any, behavioural evidence was already being collected. It then developed a behavioural risk assessment plan, including a set of questions for interviewing employees, data sampling guidelines and a scoring template, and tested the plan in a number of business units, before rolling it out across the entire firm.

The bank now monitors the cultural and behavioural factors that affect how it manages risk and compliance on a regular basis. It also reports its findings to the business units, provides them with practical guidance in addressing cultural challenges and benchmarks its progress in creating a culture that supports its risk processes and controls. This has enabled it to reduce the frequency and severity of the problems it encounters, reduce its remediation costs and strengthen its reputation.

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When internal audit suggested that cultural changes might improve the way in which a major financial institution managed risk, the board commissioned a team of independent experts to help it investigate the situation more thoroughly. The team began by analysing the results of an employee engagement survey the institution had recently conducted to get a better understanding of attitudes to risk within the different business units. This enabled it to identify a number of opportunities for improving the process for making decisions about risk and holding people accountable for the choices they made. It also highlighted several areas that warranted further work, including the development of more comprehensive employee surveys and information reviews.

Faced with a regulatory investigation and major criticism from key stakeholders over various ethical shortcomings, the board of a global automotive company recognised that it needed to make sweeping changes to the way in which its code of conduct was applied. In particular, employees required extensive training both to implement new controls in key processes such as sales and marketing, accounting and human resources, and to encourage a totally different attitude.

The chief executive took the lead in driving these changes by personally explaining them to employees in ‘town hall meetings.’ He also made cultural change a regular item in board meetings, tasked senior managers with implementing the details of the change programme in their own areas of responsibility and linked their bonus payments to their progress. Lastly, he set up a transparent reporting system to enable top management to monitor the results and ensure that ethical standards were maintained throughout the business.