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Internally reporting risk in financial services: an empirical analysis

Bryce, Cormac; Chmura, Thorsten; Webb, Robert; Stiebale, Joel; Cheevers, Carly

Authors

Cormac Bryce

Thorsten Chmura

Robert Webb

Joel Stiebale

Carly Cheevers



Abstract

The enduring failure of financial institutions to identify and deal with risk events continues to have serious repercussions, whether in the form of small but significant losses or major and potentially far-reaching scandals. Using a mixed-methods approach that combines an innovative version of the classic dictator game to inform prosocial tendencies with the survey based Theory of Planned Behaviour, we examine the risk-escalation behaviour of individuals within a large financial institution. We discover evidence of purely selfish behaviour that explains the lack significance in pressure to adhere to the subjective norms of colleagues around intention to report risks. A finding that has potentially important implications for efforts to instil a high-error management climate and incentivise risk reporting within organisations where risk, if ignored or unchecked, could ultimately have consequences that extend far beyond the institutions themselves.

Journal Article Type Article
Journal Journal of Business Ethics
Print ISSN 0167-4544
Electronic ISSN 1573-0697
Publisher Springer Verlag
Peer Reviewed Peer Reviewed
APA6 Citation Bryce, C., Chmura, T., Webb, R., Stiebale, J., & Cheevers, C. (in press). Internally reporting risk in financial services: an empirical analysis. Journal of Business Ethics, https://doi.org/10.1007/s10551-017-3530-6
DOI https://doi.org/10.1007/s10551-017-3530-6
Keywords Risk Escalation, Dictator Game, Meta-Analysis, Error-Management Climate
Publisher URL https://link.springer.com/article/10.1007%2Fs10551-017-3530-6
Copyright Statement Copyright information regarding this work can be found at the following address: http://creativecommons.org/licenses/by/4.0

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Copyright Statement
Copyright information regarding this work can be found at the following address: http://creativecommons.org/licenses/by/4.0





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