The Deployment Of An Effective Risk Governance Framework

The legislature in France imposes the obligation to assess the effectiveness of a risk governance framework (audit, internal control, risk management, fraud prevention, etc.) that is to say, to prove that the group has implement devices to substantially reduce the level of risk exposure.

In general, groups are implementing self-assessment devices, testing, corrective action plans to assess this level of maturity. In almost all cases, this device is worn by middle management who should promote and report on the deployment of the latter. These devices designed in Western context is often difficult to deploy multicultural international context.

Risk Governance and risk appetite

This dimension is very sensitive in the self-assessment process – where managers must in all conscience to position a scale that ranges from “dark red” (non-existent or ineffective control) to “dark green” (control activity fully effective).

In cultures of Anglo-Saxon type often worn by the Protestant ethic, the self-assessments are often green and this often corresponds to a frequently tests confirm that assessment. Rather in risk-averse cultures, such as Japan, the self-assessments are also often green, but the tests can be defeat (disprove self-assessment) because of the difficulty of displaying a level of apparent weakness.

Risk governance and relationship to authority

The self-assessments are often made in functional level to N-4 level.Such involvement does not pose a problem in the United States or Europe. By cons, in countries with high submission to authority, sometimes you have to execute the self-evaluations only to D and D-1 levels. This must also be coupled in the latter case, a difficulty to be positioned on a folder.

Risk management and level of individualism

This third feature related to the multicultural context is very sensitive in the deployment of corrective action plans, or in the case of a self-assessment “red” or in the case of a reversing test self -Evaluation.

In countries such as France and the UK, with high levels of individualism, the action plan is being implemented individually and only if the owner Action Plan sees a personal benefit.

In countries such as Belgium, where premium the interest of consensus, or in countries like Germany, the interest of the collective sense prevails over the individual interest. The corrective action plan will be implemented in the interest of the company.

Risk management and masculine / feminine values ​​versus
Masculine values ​​are expressed in the company via a corpus of powers codified symbols.
Steps to promote risk governance within the company, can be deployed by psychological profiles “masculine” not in the overall interest of the entity, but with “Pride” or the logic of power as social as lift.

Risk governance and culture of action / performance versus analysis

Finally, implementing culture of countries favoring the action, are very proactive in terms of deployment of a risk governance framework, if the rules are not clearly defined and interpretative. As against a simple culture of execution can be very dangerous in the deployment of a risk management device, if the scope of analysis has not been properly defined (related parties, real issues, context etc.) .

In summary, it is impossible to deploy a monolithic-ally risk governance system in an international context. Given the multicultural constraints discussed in this blog, it is necessary to customize the device to ensure effectiveness.

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