Internal compliance, risk management, and their impact on culture in financial firms

Kosmas Kaprinis

Chapter 9 in Corporate Governance and Culture in Financial Institutions, 2025, pp 262-284 from Edward Elgar Publishing

Abstract: Over the past years, regulatory bodies and supervisors worldwide have placed increased emphasis on risk culture as part of the risk management framework of financial institutions. Policy and scholarly interest in the impact of risk culture on compliance departments has similarly grown significantly. We argue that the primary challenge in addressing risk culture within compliance departments is not the necessity for organisational restructuring, but rather a lack of clear conceptual understanding of risk culture. Our recommendations emphasise the significance of experimenting with compliance practices, empowering mid-level management, increasing the involvement of compliance and risk managers in business operations and recognising the value of informal networks among compliance professionals.

Keywords: Risk culture; Compliance; Risk management; Three Lines of Defence; TLD; Internal controls; European Central Bank; ECB (search for similar items in EconPapers)
Date: 2025
ISBN: 9781035317899
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