Stakeholder perception of risk tone in an insurance company
Abstract
was evaluated in this study. Risk tone was viewed as both the result, and behavioural enabler of risk culture. The pilot version of the UARM Risk Culture Questionnaire (UARM RCQ-2016) was used as the survey instrument. The questionnaire consists of demographic, risk culture and diagnostic items based on key practices linked to the integration of risk management principles into organisational management. The population for this study consisted of risk practitioners across the organisation as well as a smaller business sample. Eighty-three employees completed the survey. This sample allowed for preliminary conclusions on the usefulness of this questionnaire to assess the organisation’s risk culture. Statistically significant differences at the 90% confidence level were found for factor scores and individual item responses between management levels, as well as between risk stakeholder and business management functions. Management level differences indicated that senior managers felt more comfortable with their own understanding of risk in the organisation than middle management and non-managers. Risk management stakeholders were more positive about the value that risk management adds to business management than the business participants. The business participants were more confident in their knowledge of how well the organisation is doing in meeting its objectives. Participants provided comments on how risk management can be improved with key recommendations being improving accountability and responsibility, training, and awareness and communication. In addition, semi-structured interviews were conducted with a sample of the executive committee members of the organisation and key improvements noted; these included a more uniform approach across the organisation and simplifying technical concepts. These findings provide diagnostic pointers to areas where the integration of risk principles should be addressed to improve the risk tone and culture in the organisation. Based on the research results, the questionnaire shows promise for more extended use by the organisation and other insurance companies.