Staff must act with integrity (doing the right thing) and promptly
escalate observed non-compliance within or outside the organisation
(no surprises approach).
The leadership of the institution promotes, monitors, and assesses the
risk culture of the financial institution; considers the impact of culture on
safety and soundness; and makes changes where necessary.
Accountabilit
y
Relevant employees at all levels understand the core values of the
institution and its approach to risk, are capable of performing their
prescribed roles, and
are aware that they are held accountable for their
actions in relation to the institution’s
47
FSB’s indicators of a sound bank risk culture
(continued)
Effective
communication
and challenge
A sound risk culture promotes an environment of open communication and
effective challenge in which decision-making processes encourage a range of
views; allow for testing of current practices; stimulate a positive, critical
attitude among employees; and promote an environment of open and
constructive engagement.
Incentives
Performance and talent management encourage and reinforce maintenance
of the financial institution’s desired risk management behaviour. Financial and
nonfinancial incentives support the core values and risk culture at all levels of
the institution.
48
Source: Guidance on Supervisory Interaction with Financial Institutions on Risk Culture, Financial
Stability Board (2014)
•
NOT
FOR
RESALE.
All
materials
produced
for
this
course
of
study
are
reproduced
under
Part
VB
of
the
Copyright
Act
1968,
or
with
permission
of
the
copyright
owner
or
under
terms
of
database
agreements.
These
materials
are
protected
by
copyright.
Monash
students
are
permitted
to
use
these
materials
for
personal
study
and
research
only.
Use
of
these
materials
for
any
other
purposes,
including
copying
or
resale,
without
express
permission
of
the
copyright
owner,
may
infringe
copyright.
The
copyright
owner
may
take
action
against
you
for
infringement.
MONASH
BUSINESS SCHOOL
Copyright @ 2019
49
You've reached the end of your free preview.
Want to read all 49 pages?
- Three '16
- risk principles
