Risk culture and ethics

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Risk culture and ethics

Enabling responsible business practices

Trust in corporations is at its lowest point in history and the spot light on corporate ethics and culture has never shone so bright. Increasingly, regulators, boards and executives are recognising the significant role of ethics and culture in enabling responsible and risk aware business practices. Today, the responsibility sits squarely with the board.

Underlying most high-profile organisational failures, public scandals and significant compliance breaches, is people.  The way people think, behave and make decisions has a direct impact on the organisation’s ability to achieve strategic objectives, enhance its relationships, and protect itself from harm.

Boards and Executives are responsible for ensuring the ethical foundations of the organisation is reflected in the culture of the business, supports the identification and mitigation of risks, and delivering on its customer promises.   

 A risk aware and ethical culture is a competitive advantage, enabling organisations to thrive and remain resilient. Driven by shared mindsets and behavioural norms, culture is critical in shaping and supporting the way people think, behave and make decisions. When the day-to-day work pressures are exerted, or policies may be unclear on the right course of action, people instinctively do the right thing.

Leaders should seek to accurately assess their ethical foundations and the current culture and whether it supports their strategy by asking the following questions: 

  • How do your people make decisions in alignment with the ethical foundations of the organisation, its risk appetite and the strategic objectives? 
  • Are your leaders actively shaping and monitoring the ethical foundations and culture of the organisation?
  • How do your people understand, identify and manage risk, particularly when under pressure or in ambiguous and uncertain situations?
  • Do the current frameworks, systems, processes and controls support the desired culture across the organisation?
  • How do you monitor the culture with reliable and valid approaches, leveraging data analytics, and aligning with leading practice and regulatory expectations?
  • How do you change the culture to bring it into alignment with your aspirations, in order to achieve your strategic objectives?
Enabling Risk Intelligent Cultures

<p>Deloitte&rsquo;s multidisciplinary<strong>&nbsp;leadership, culture, &amp; ethics</strong>&nbsp;team are experts in&nbsp;helping transform&nbsp;organisations&nbsp;to be responsible corporate citizens&nbsp;from their ethical foundations to the way you practice business&nbsp;day to day, developing followership amongst your people and customers. We bring experience and expertise to your organisation through:&nbsp;</p> <p>&nbsp;</p> <ul> <li>Creating&nbsp;ethical&nbsp;frameworks to support decision making grounded in the values of the business&nbsp;&nbsp;</li> <li>Developing Board and Executive capability to understand and monitor&nbsp;ethics,&nbsp;culture and risk culture&nbsp;&nbsp;</li> <li>Designing and applying&nbsp;culture and risk culture&nbsp;frameworks, including organisation-wide and targeted deep dive assessments, and&nbsp;leverage the full range of data available&nbsp;</li> <li>Developing&nbsp;culture and risk culture assessment capability, including&nbsp;within&nbsp;Internal Audit, Risk Teams,&nbsp;Human Resources,&nbsp;and&nbsp;other&nbsp;BUs&nbsp;&nbsp;&nbsp;&nbsp;</li> <li>Designing and implementing holistic culture transformation programs that bring together strategy, ethics and risk&nbsp;&nbsp;</li> <li>Supporting leaders and teams to manage and shape culture through evidence-based leadership diagnostic tools and development programs&nbsp;</li> <li>Applying market leading advanced data analytics to identify hot spots, trends and emerging risks related to&nbsp;organisational&nbsp;and risk culture&nbsp;</li> <li>Translating ethical frameworks into Codes of Ethics, and other business levers of change&nbsp;</li> <li>Aligning your ethical foundations to your culture and your&nbsp;business impacts on society and the environment.&nbsp;&nbsp;</li> </ul>

<p><strong>International construction and engineering organisation</strong></p> <p>&nbsp;</p> <p>A large international construction and engineering organisation&nbsp;wanted to support their people to make responsible decisions to enhance their position as a responsible corporation, attracting clients and employees alike.&nbsp;</p> <p>&nbsp;</p> <p>We worked with leaders to translate and operationalise the company&rsquo;s mission into a responsible decision-making framework, combining our expertise with a deep understanding of the organisation. Sound ethical assumptions along with an understanding of the standards and norms of the organisation underpinned the frameworks construction.</p> <p>&nbsp;</p> <p>The framework&nbsp;is being used by the Executive to make supportive,&nbsp;proactive, balanced, collaborative and transparent&nbsp;decisions when faced with ethical dilemmas. The framework&nbsp;continues to be rolled out and embedded into systems, process and organisational culture globally.&nbsp;&nbsp;</p> <p>&nbsp;</p> <p><strong>Big Four bank</strong></p> <p>&nbsp;</p> <p>This Big Four bank selected Deloitte to undertake an advanced culture assessment, which aimed to bring together culture and risk culture under one methodology to understand how culture affected their strategic goals and satisfied regulatory scrutiny.</p> <p>&nbsp;</p> <p>We assisted the organisation in translating their purpose and values into a clear target culture of mindsets and behaviours. We then designed a culture measurement framework and approach, drawing upon both perceptions based data (survey, interviews, and focus groups) together with existing business data.</p> <p>&nbsp;</p> <p>Our insights were able to provide the executive and board with new insights into how their culture was affecting their ability to deliver on strategy, and recommendations on actions to further leverage their culture to achieve their strategic goals.</p>

<p><strong>Risk Culture Survey Diagnostics </strong></p> <p>&nbsp;</p> <p>Provides rich insight into the organisation&rsquo;s risk culture, including strengths, vulnerabilities, &lsquo;hot spots&rsquo; across the organisation and drivers. Design can be fully customised to suit your needs and our reporting is driven by advanced analytics, with a range of presentation formats, automation and interactive dashboards available to suit various stakeholder groups.</p> <p>&nbsp;</p> <p><strong>Risk Leadership Psychometric Assessments </strong></p> <p>&nbsp;</p> <p>Customisable behavioural assessment based on research provides deep individual, team and/or organisation-wide insight into the tone from the top set by Boards, Executives, and leaders at all levels. Insights inform targeted development initiatives to strengthen the impact of leadership on risk culture.</p>

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Victoria Whitaker

Victoria Whitaker

Partner, Risk Advisory

Victoria is a partner in Risk Advisory and leads the responsible business practice. Victoria’s work focuses on developing ethical corporations, with strong cultures who build trust with external stake... More