Internally reporting risk in financial services: an empirical analysis

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

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.

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

• Journal Article Type: Article
• Acceptance Date: Apr 3, 2017
• Online Publication Date: Apr 26, 2017
• Deposit Date: Apr 24, 2017
• Publicly Available Date: Apr 26, 2017
• Journal: Journal of Business Ethics
• Print ISSN: 0167-4544
• Electronic ISSN: 1573-0697
• Publisher: Springer Verlag
• Peer Reviewed: Peer Reviewed
• DOI: https://doi.org/10.1007/s10551-017-3530-6
• Keywords: Risk Escalation, Dictator Game, Meta-Analysis, Error-Management Climate
• Public URL: https://nottingham-repository.worktribe.com/output/857291
• Publisher URL: https://link.springer.com/article/10.1007%2Fs10551-017-3530-6
• Contract Date: Apr 24, 2017