Giving risk management culture a role in strategic planning

Abstract

Strategically planned and implemented risk management paves the way for competitive advantage and a decisive edge for global financial institutions. The importance of risk management becomes more evident in financial instability periods. The failure of global financial institutions in the recent financial crisis revealed that firms with strong risk management and culture were more prepared and economically less damaged. As financial institutions have been criticized severely about risk management practices, it also becomes clear that most financial institutions have difficulties in developing a risk management culture. To have a clear understanding of risk management culture, the chapter aims to highlight a need to extend our understanding of risk management culture and how it can find a voice in the strategic planning of global financial institutions.