RSM Germany: strong risk culture more important than regulations
Source: European CEO.
A successful risk management system requires more than just rules and regulations: it requires a culture that works across all levels of an organisation.
In the aftermath of the Enron and WorldCom accounting fraud scandals, the US Congress took it upon itself to introduce tighter industry regulations by passing the Sarbanes-Oxley Act in 2002.
While legislative action like this is necessary to maintain the hygiene of a given sector, it is often only provoked by events that were entirely preventable in the first place.
“A risk management system will only work effectively if there is a strong risk culture underpinning it.”