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C2.2 ENHANCE RISK MANAGEMENT CLIMATE & MINDSETS
Understand and evolve the risk management climate and mindsets to create a climate where individuals factor risk into their daily jobs and risk-taking is consistent with the overall objectives of the organization.


An entity's risk climate and risk philosophy include norms for thinking, talking and acting with regard to risk. An entity should strive to create an atmosphere where these norms are formally established and communicated, and "risk" taking is consistent with the overall objectives of the entity. Importantly, management should ensure that all employees understand that, unlike taking "business risks," it is unacceptable to take "legal risks" by deliberately violating laws or regulations in pursuit of financial goals and objectives.
Standards & Guidance
    C2.2.S01
  • Determine the entity's risk culture and ascertainable attitudes about risk and risk management.
    C2.2.S02
  • Determine the risk philosophy of the entity (e.g., whether it approaches risk in a conservative or aggressive manner).
Core Practices
    C2.2.101
  • Survey a sample of the workforce regarding:
    > how aggressive or conservative the organization is with regard to risk;
    > whether leadership communicates risk appetite;
    > whether leadership models appropriate risk-taking conduct;
    > whether individuals actually encounter "risk" in job;
    > whether workforce is prepared for risks.
    C2.2.102
  • Communicate the need to factor risk into business decisions.
    C2.2.103
  • Communicate that it is acceptable to take business risks.
Additional Practices
    C2.2.201
  • Provide training and examples of appropriate and inappropriate risk-taking to the workforce.
    C2.2.202
  • Provide a mechanism for the workforce to ask for advice about risk-taking conduct.
    C2.2.203
  • Provide visible approval for appropriate risk-taking conduct and visible disapproval for inappropriate risk-taking conduct.
    C2.2.204
  • Define a repeatable methodology for understanding and analyzing the entity's risk climate and philosophy.
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Domain Supplement