Does executive accountability enhance risk management and risk culture?

Elizabeth Sheedy; Dominic S. B. Canestrari-Soh

doi:10.1111/acfi.13087

Does executive accountability enhance risk management and risk culture?

Elizabeth Sheedy^*, Dominic S. B. Canestrari-Soh

^*Corresponding author for this work

Research output: Contribution to journal › Article › peer-review

2 Citations (Scopus)

58 Downloads (Pure)

Abstract

We evaluate a novel regulation designed to address ongoing risk management failures: Australia's Banking Executive Accountability Regime (BEAR). This mixed methods study draws on a survey and 41 interviews with accountable persons and their reports across 15 organisations. Consistent with theory and previous experimental research, the study demonstrates the benefits of enhanced accountability for promoting more diligent ‘system 2’ behaviour. We provide evidence that BEAR promotes greater felt accountability among senior executives which in turn stimulates more proactive and diligent risk management behaviour. This behaviour has the potential to attenuate many of the behavioural biases associated with risk management failures.

Original language	English
Pages (from-to)	4093-4124
Number of pages	32
Journal	Accounting and Finance
Volume	63
Issue number	4
Early online date	30 Mar 2023
DOIs	https://doi.org/10.1111/acfi.13087
Publication status	Published - Dec 2023

Bibliographical note

© 2023 The Authors. Accounting & Finance published by John Wiley & Sons Australia, Ltd on behalf of Accounting and Finance Association of Australia and New Zealand. Version archived for private and non-commercial use with the permission of the author/s and according to publisher conditions. For further rights please contact the publisher.

Keywords

accountability
banking
regulation
risk culture
risk management
three lines model

Access to Document

10.1111/acfi.13087Licence: CC BY-NC-ND

Publisher version (open access)Final published version, 244 KBLicence: CC BY-NC-ND

Cite this

@article{413770f80c5e4e6dbbdd9eefa8bb0739,

title = "Does executive accountability enhance risk management and risk culture?",

abstract = "We evaluate a novel regulation designed to address ongoing risk management failures: Australia's Banking Executive Accountability Regime (BEAR). This mixed methods study draws on a survey and 41 interviews with accountable persons and their reports across 15 organisations. Consistent with theory and previous experimental research, the study demonstrates the benefits of enhanced accountability for promoting more diligent {\textquoteleft}system 2{\textquoteright} behaviour. We provide evidence that BEAR promotes greater felt accountability among senior executives which in turn stimulates more proactive and diligent risk management behaviour. This behaviour has the potential to attenuate many of the behavioural biases associated with risk management failures.",

keywords = "accountability, banking, regulation, risk culture, risk management, three lines model",

author = "Elizabeth Sheedy and Canestrari-Soh, {Dominic S. B.}",

note = "{\textcopyright} 2023 The Authors. Accounting & Finance published by John Wiley & Sons Australia, Ltd on behalf of Accounting and Finance Association of Australia and New Zealand. Version archived for private and non-commercial use with the permission of the author/s and according to publisher conditions. For further rights please contact the publisher.",

year = "2023",

month = dec,

doi = "10.1111/acfi.13087",

language = "English",

volume = "63",

pages = "4093--4124",

journal = "Accounting and Finance",

issn = "0810-5391",