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7 Steps to Create a Risk-Aware Culture

How to build an organization in which everyone incorporates risk considerations into every decision—and why that’s crucial to long-term success.

By Roger Dunkin | September 21, 2020 at 07:14 PM

The Internal Revenue Service launched a new channel for employees to confidentially raise concerns and risks to agency leadership. The agency has one of the most mature enterprise risk management (ERM) programs in government—and this is its latest move to promote a risk-aware culture. By empowering its workforce to spot and elevate issues as they arise, the IRS has prepared itself to recognize and address threats before they turn into problems for the agency.

This approach is representative of a broader trend: Many public- and private-sector organizations are making risk awareness part of their internal culture by putting risk management front and center for all employees, not just those with “risk” in their title. Amid the coronavirus pandemic, organizations learned just how important it is to be agile and quickly adapt to changing conditions. Pushing risk responsibilities out to the edges of an organization helps decision-makers quickly identify changing conditions and take corrective actions to mitigate emerging threats before they can escalate into something more harmful.

Aside from Covid-19, risks are growing in number and complexity, and identifying and managing myriad exposures takes an all-hands-on-deck mentality. In a risk-aware corporate culture, risk management is part of every critical decision by every stakeholder. Technology can raise stakeholders’ risk awareness by providing visibility into exposures across the organization and consistent, reliable data about the potential impact of those risks.

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