UK businesses struggle to develop positive risk culture, according to new survey

Research conducted by QBE reveals that the majority of UK businesses (70%) are failing to address the importance of embedding a positive risk culture

QBE surveyed 377 risk decision makers from small-, medium-sized and larger businesses in the UK to establish the extent to which companies have a positive risk culture embedded, the steps taken to achieve it and the actions that were the most successful.

The research, announced before the Airmic conference, found that only three in 10 businesses felt that they had a positive risk culture embedded to a significant degree. Larger companies (with more than 250 employees) were almost twice as likely to have achieved this than smaller businesses (with 50 or fewer employees). The survey also found that the level of embedding is weaker in sectors such as leisure, manufacturing and telecoms, compared to the professional and financial services sectors.

Why is there such a big problem?

The majority of risk decision makers interviewed had taken steps to develop the core components of a robust risk management programme, notably getting senior management buy-in, encouraging employees to talk out about risk-related issues and providing regular training. So how can the failure to embed a positive risk culture be explained?

The difference between those that have managed to entrench a positive culture and those that have not is the breadth of activities undertaken. Successful businesses have also to a much greater degree:

• identified what type of culture their business wants to have;
• publicised a set of key performance indicators on risk; and
• included positive risk management behaviours in employees’ annual assessment

Richard Thomas, head of risk solutions at QBE, commented: “Businesses are struggling to develop their risk management programmes and our research suggests why. Implementation of a robust risk management culture reduces incidents, which we know contributes to better productivity and enables operational cost savings. Although risk managers are making good headway gaining senior level support, I would encourage them to capitalise on this and leverage the expertise of their insurer to extend their range of risk management activities.”