Risk culture and organisational culture are often treated as the same thing, but they are not. Risk culture is the slice of organisational culture that determines how people actually perceive, discuss and act on risk in day-to-day decisions.
What exactly is risk culture?
The Institute of Risk Management describes risk culture as the values, beliefs, knowledge, attitudes and understanding about risk that are shared by people with a common purpose. In simple terms, it is what people really think and do about risk: which risks they notice, how they talk about them, and how far they feel responsible for managing them.
Risk culture shows up in questions like:
- Do people raise bad news early or hide it?
- Are near misses treated as learning or as reasons to blame?
- Is risk information used in decisions, or added as a slide at the end?
When the answers are healthy, risk culture acts like an invisible safety net that supports good decisions without stifling performance.
How is organisational culture different?
Organisational culture is the broader pattern of shared values, norms and behaviours that shape “how things are done around here” across all aspects of work, not just risk. It influences collaboration, innovation, customer centricity, hierarchy, and communication style.
Risk culture sits inside organisational culture, but they can diverge. An organisation can have:
- A friendly, innovative organisational culture but a weak risk culture if people routinely bypass controls or treat risk management as a tick-box exercise.
- A formal, hierarchical culture yet a strong risk culture if issues are escalated early, risk appetite is clear, and leaders take risk data seriously in strategy discussions.
So, organisational culture is the climate; risk culture is how that climate affects risk-taking and risk control.
IRM’s lens: attitudes, behaviours, culture
IRM and risk leaders often describe risk culture through the A-B-C lens: Attitudes, Behaviours, Culture.
- Attitudes are the stances individuals or groups adopt towards risk – from very comfortable with risk to very concerned about it.
- Behaviours are the observable actions that show how people actually treat risk: do they follow escalation protocols, challenge unrealistic targets, or ignore key risk indicators and warning signs?
- Culture is the shared pattern that emerges over time from those attitudes and behaviours across the organisation.
A positive risk culture exists when attitudes and behaviours consistently align with the organisation’s stated risk appetite and values. If an organisation claims to be “risk aware but not risk averse,” but managers punish anyone whose project fails even when risks were taken within agreed appetite, attitudes will shift toward fear and concealment.
IRM’s Risk Culture Aspects Model
To move beyond slogans, IRM’s Risk Culture Aspects Model identifies multiple aspects that together signal the “health” of risk culture. These aspects cover, among other things:
- How aligned culture is with the business model and strategy.
- How transparently risk is communicated up, down and across.
- How clear roles and accountabilities for risk really are.
- How reward and performance systems influence risk-taking.
Organisations can use surveys, interviews and workshops to score themselves against these aspects, highlight weak spots and track progress. This makes risk culture something boards can actually govern: a set of observable patterns and levers, not a vague “tone at the top” idea.
Where the two cultures collide in practice
The tension between risk culture and organisational culture becomes visible in everyday choices. Consider three recurring collision points:
- Growth vs prudence
A sales-driven organisational culture may push “growth at any cost.” If risk culture is weak, targets override credit standards, leading to stressed assets and write-offs later. When risk culture is strong, growth and prudence are balanced through clear limits, early challenge and transparent trade-offs. - Innovation vs control
A highly innovative culture values speed and experimentation. Without a matching risk culture, teams ship products without proper testing or ignore security reviews. With a strong risk culture, innovation processes embed risk identification, risk assessment and mitigation as design features, not last-minute hurdles. - Hierarchy vs speaking up
In hierarchical cultures, junior staff may hesitate to challenge seniors. A healthy risk culture deliberately counterbalances this through open channels for risk communication, escalation protocols and psychological safety for speaking up about risks.
In each case, risk culture acts as the “governor” that ensures organisational culture does not slide into unhealthy risk-taking or paralysing risk avoidance.
Why boards must treat risk culture separately
For boards and senior leaders, the key insight is that managing “culture” in general is not enough; risk culture needs explicit attention, measurement and governance. Without a clear focus on the people’s side of risk at the board leadership level, organisations struggle to embed enterprise risk management and to sustain long-term viability.
Strong risk culture improves resilience because:
- People understand the organisation’s risk appetite and know what “acceptable” risk looks like in their role.
- Risk information travels quickly and honestly, enabling faster responses to emerging threats.
- Decision-making quality improves as leaders weigh upside and downside, not just short-term metrics.
Boards are increasingly using risk-culture assessment tools, targeted surveys and deep-dive workshops to see where stated values, incentives and daily behaviours are misaligned. Often, that work exposes sub-cultures – for instance in particular business units or geographies – where risk is either ignored or driven underground. This highlights a serious governance risk, as the suppression of risk concerns undermines transparency, effective oversight and timely intervention.
Building a strong risk culture inside your existing culture
The practical challenge is not to replace organisational culture with something entirely new, but to shape risk culture within it. Key levers include:
- Clarifying risk appetite and tolerance
Translate high-level appetite statements into simple, operational guidance for different functions: what types of risk are welcomed, which are acceptable with controls, and which are off-limits. - Leading by example
Senior leaders must consistently model desired behaviour: asking risk questions in strategy meetings, welcoming early warnings, and distinguishing between well-governed risk-taking and negligent behaviour. - Aligning incentives and performance
Link rewards to risk-adjusted performance and quality of decisions, not just volume, growth or headlines. This sends a clear signal that “how” results are achieved matters as much as “what” is achieved. - Strengthening risk conversations
Invest in training and communication so that people share a common language about risk, know how to escalate concerns and can participate in risk discussions confidently.
When these elements reinforce each other, risk culture becomes the way organisational culture “behaves” under uncertainty. A healthy organisational culture is a competitive advantage; a healthy risk culture is the safeguard that ensures that advantage is not destroyed by a single bad bet.
In a world of fast-moving risks – from cyber and climate to conduct and reputational risk – the question is no longer whether you have a culture, but whether you have the right risk culture woven into it.
FAQS
1.What is the difference between risk culture and organisational culture?
The Institute of Risk Management describes risk culture as the values, beliefs, knowledge, attitudes and understanding about risk that are shared by people with a common purpose. In simple terms, it is what people really think and do about risk: which risks they notice, how they talk about them, and how far they feel responsible for managing them.
Organisational culture is the broader pattern of shared values, norms and behaviours that shape “how things are done around here” across all aspects of work, not just risk. It influences collaboration, innovation, customer centricity, hierarchy, and communication style.
Organisational culture is the climate; risk culture is how that climate affects risk-taking and risk control.
2. Why is risk culture important in an organization?
Risk culture is important in an organization for the following reasons –
If an organisation claims to be “risk aware but not risk averse,” but managers punish anyone whose project fails even when risks were taken within agreed appetite, attitudes will shift toward fear and concealment.
If risk culture is weak, targets override credit standards, leading to stressed assets and write-offs later. When risk culture is strong, growth and prudence are balanced through clear limits, early challenge and transparent trade-offs.
A highly innovative culture values speed and experimentation. Without a matching risk culture, teams ship products without proper testing or ignore security reviews.
A healthy risk culture deliberately counterbalances hierarchical cultures through open channels, escalation protocols and psychological safety for speaking up about risks.
A strong risk culture acts like an invisible safety net that supports good decisions without stifling performance.
3. How does risk culture supports enterprise risk management?
A strong risk culture supports enterprise risk management in the following manner –
- In a strong risk culture, issues are escalated early, risk appetite is clear, and leaders take risk data seriously in strategy discussions.
- Risk culture acts as the “governor” that ensures organisational culture does not slide into unhealthy risk-taking or paralysing risk avoidance.
- Strong risk culture improves resilience because:
– People understand the organisation’s risk appetite and know what “acceptable” risk looks like in their role.
– Risk information travels quickly and honestly, enabling faster responses to emerging threats.
– Decision-making quality improves as leaders weigh upside and downside, not just short-term metrics.
