Risk Governance, Structures, Culture and Behaviour : A View from the Inside

This study uses survey data to demonstrate how risk culture, over and above employee characteristics and risk structures, affects risk behaviour in banks. In 2014-2015 we surveyed employees from seven major banks headquartered in Australia and Canada. All seven have adopted best practice risk governance. On average, risk structures are perceived favourably with the exception of remuneration. Risk culture varies at the business unit level as well as by firm and country. Risk culture is a significant predictor of risk behaviour after controlling for personal characteristics and perceptions of risk structures. Further managerial and supervisory attention should be paid to culture in financial institutions