Conclusion and Recommendations

A few scholars have investigated the relationship between risk culture and business resilience. As such, there is less research literature addressing the subject matter. However, the various empirical research data analyzed shows a greater correlation between a healthy risk culture, effective corporate management, and business resilience. They confirm that cultivating a culture that reflects the business activities of an enterprise improves the ability to withstand difficulties, hence resilience. These findings show that risk culture serves to link good governance and corporate resilience. Results of various study projects (Alpaslan et al., 2009; Barnabei, 2008; Kahneman et al., 1982; March & Shapira, 1982) have emphasized on the individual risk aversive tendencies that is responsible for managers’ behaviors in striving to avoid taking personal responsibility for business risks taken.

Even though a leader wants to transfer the responsibility of risk-taking to business, they tend to make them out of personal incentives rather than organizational. This means that the corporate leadership would proudly make risk decisions when they have the necessary support from the board and the staff. A risk culture serves to create a supportive environment for the administration, in helping quantify appetite, establish capacity for tolerance, and help sail trough crisis situations arising from risks taken. This aspect thus connects leadership and corporate resilience because it provides the administration with the capacities needed to ensure continuity in existence and performance.

Richter (2014, p. 239) observed that without a risk culture, the management might find it hard to transform the organizational objectives into realities in the real world markets. It is impossible to predict future performance with precise accuracy, which means that plans are subject to uncertainties. These uncertainties need capacities that can address them as they arise. A systemic and structured risk culture, thus, play a major role in increasing resilience of an enterprise. Conceptually, a business organization that embeds risk management strategies in its overall strategies has an enhance ability to navigate undesirable circumstances. Most importantly, the enterprise gains more capacity to take greater and promising risks that propel it to newer opportunities.

A strong risk cultures must exhibit university, commonality, transparency, and continuity as suggested by Deloitte (2013, p. 8). Inculcation of these attributes into a culture system takes time and significant resources. Development of a strong risk culture goes through various stages that include awareness, the transformation of current arrangements, monitoring, evaluation, and improvement. However, organizations should be vigilant not to fall victim to an overly institutionalized risk culture that becomes a liability to the performance of an organization. The Institute of Risk Management warns that when a risk management system does not reflect the needs and objectives of the organization accurately, exposure to negative possibilities is heightened. The same sentiments have been echoed by the Institute of International Finance (IIF), which observes that even with an acceptable risk culture it is hard to execute in some instances. Therefore, organizations should invest resources and time in developing a healthy risk culture that captures both the risk appetite and tolerance. The process of building a healthy culture is quite expensive and time-consuming, but it is worth the trouble because the continued existence of an enterprise may depend on it. More research needs to conduct to build more knowledge and insights that can be used to further the understanding of the role of risk culture in fostering good governance and corporate resilience.