Chapter 12: Conduct and Culture Flashcards
(20 cards)
Is Conduct a risk?
No, conduct is not a risk in itself, but can be the possible consequence of other risks materialising.
What is Conduct at a firm?
As a simple definition.
Refers to the behaviours of individuals within the organisation and how they adhere to policies, rules and ethical standards.
What is Culture at a firm?
As a simple definiton.
Encompasses the shared values, beliefs and norms, that influence how employees think, behave and interact within the organisation.
Why are Culture and Conduct important at work?
Integr…..Ris……..Stakehol…….Sustai……
- Integrity and Ethics
- Risk Awareness
- Stakeholder trust
- Sustainable success
How does a firm achieve change in culture and conduct?
- Willingness and Ability
- Training and guidance
- Clarifying basics (can never be too obvious)
What is meant by “Social Motivation” in psychological terms?
Influenced by peer pressure e.g. doing something as other are
What is meant by “Personal Motivation” in psychological terms?
Driven by individual preferences e.g. doing what we enjoy
What is meant by “Structural Motivation” in psychological terms?
Encouraged by formal rewards or incentive
schemes.
Should opinion leaders be consulted when implementing changes within an organisation?
Why?
Yes, opinion leaders should be consulted before implementing changes as their agreement can significantly help promote recommended behaviors.
How do influencers impact group behavior?
Do as I do, not……..
Influencers set the tone for the group, and leading by example (“Do as I do”) is more impactful than just giving instructions (“Do as I say”).
What is crucial for lasting change in management attitude?
Who commitment to what?
Senior management’s genuine commitment to risk culture is crucial for lasting change, focusing on actions rather than just the tone.
How does propinquity affect team collaboration?
Fosters what?
Proximity fosters familiarity, understanding, and acceptance, enhancing collaboration and communication between teams.
What is the psychological impact of occupational propinquity?
Is virtual propinquity less effective?
Working closely together leads to mutual acceptance over time, though virtual propinquity may be less effective than physical proximity.
What are incentive structures and their importance?
COI?
Incentive structures are strong drivers of behavior, and firms must eliminate conflicts of interest between remuneration and risk management.
What is the role of negative reinforcement in rule compliance?
Negative reinforcement is necessary for repeated or intentional rule violations and must be predictable, credible, and consistent.
How can positive reinforcement be utilized in risk culture?
Is this utilised enough?
Positive reinforcement, though underutilized, is highly effective in recognizing and rewarding good conduct and risk management progress.
What is conduct risk and its potential impact?
Conduct risk is the risk of inappropriate, unethical, or unlawful behavior by employees, leading to legal penalties, reputational damage, and financial losses.
What methods are used for assessing conduct risk?
5 methods
Methods include:
* Surveys
* Incident reporting systems
* Audits
* Reviews
* Behavioral analytics.
What tools are used to measure culture and conduct?
Surveys?
Tools include culture surveys, focus groups, performance metrics, exit interviews, and 360-degree feedback.
What are future trends in conduct and culture?
Future trends include behavioral regulation, integration with risk management, and continuous improvement based on new insights and regulatory developments.
