203. How to promote risk aware culture

💡 Executives should prioritize pausing and considering risks before making important decisions to foster a risk-based decision-making culture within the organization.
💼 Implementing changes in decision-making processes, including preparation, presentation, discussion, documentation, and monitoring, can have a significant impact on promoting a risk aware culture.
🔄 "Changing the approach to include scenarios and risk analysis in decision-making compares the risk versus reward for different alternatives."
💰 Changing bonus structures to reward not just performance, but also risk-adjusted performance, can be a powerful motivator for employees.
💰 When people's motivation depends on it, they start paying attention to things, even if they don't necessarily follow them.
🎮 People will always find ways to exploit and manipulate systems, highlighting the importance of having professionals involved in the process of promoting a risk-aware culture.

Promoting a risk aware culture in organizations requires implementing soft measures, changing decision-making processes, integrating risk management into policies and procedures, and adjusting the bonus structure to reward risk-adjusted performance.

1. 00:00 📊 Promote risk aware culture by implementing soft measures such as changing job descriptions, training, having risk committees, creating a central place for risk discussion, and emphasizing the importance of risk-based thinking and decision making from senior managers.
2. 01:31 💡 Changing how business makes decisions is a crucial but rarely implemented measure to promote a risk aware culture.
3. 02:06 💡 Sprinkle risk management throughout existing policies and procedures, requiring risk analysis and comparing risk versus reward before making important decisions.
4. 02:33 💡 Changing the bonus structure to reward employees for risk-adjusted performance is an effective way to promote a risk-aware culture.
5. 03:15 💡 People pay attention and adapt when their motivation depends on it, but changing the way they are paid can be challenging because people are clever.
6. 03:32 💡 Professionals are needed to create the right remuneration structure and motivation to prevent people from gaming the system when promoting a risk aware culture.
7. 03:55 🔥 The motivation for taking the right amount of risks, both short-term and long-term, is crucial for organizations to avoid excessive risk-taking driven by short-term incentives.
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Видео 203. How to promote risk aware culture канала RISK-ACADEMY - risk management & AI risk analysis