Organizations urged to Reward those who Question Corporate Culture
A report issued by ACCA and IMA says that some organizational cultures prohibit their employees from raising questions about the risks that organization is facing. This culture needs to be changed.
The report ‘A Risk Challenge Culture’ points out the need to make and apply an effective risk management process. The report clearly says that even some organizations pretend to have a healthy risk management structure but actually have it just for the name. The directors are not heartedly involved in the risk management process as they need to. The report suggests developing a culture which encourages the people to challenge and raise questions against current process and culture.The report gives an example that if a junior is prohibited to ask something about future possible threats, this is not a challenging culture.
The discussion between ACCA/IMA Accountants, for Business Global Forum, admits the fact that it is very hard for a board member or manager to challenge such policies and decisions at the time when their business is making huge profits and enjoying such high growth.
ACCA’s policy director Ewan Willars said that it is very difficult to set an attitude that encourages the employees to question the behaviors and priorities. Most of the decision makers wish to have the benefit of retrospection. But a culture having skepticism and attitude of encouraging the people who question decisions, can be highly effective in making sure that the firm has taken the right decision. Organizations need to promote a risk challenge culture which enables the employees to question and resist the current situation. But this is impossible to attain with employees not motivated or encouraged.
The auditors of the report point-out some key captions which are necessary to promote a risk challenge culture;
- Board members need to observe their risk management responsibilities with a skeptical attitude.
- The board must obtain the main risk information timely, making it useful.
- Recent history shows that the superficially acceptable inducement plans could even go wrong. Incentives need to be carefully planned to induce employees according to their behaviors.
- It is important that organizations set their risk appetites and risk tolerance, communicating these to all levels of management with all updates.