Virtue, hubris and risk culture. (2014)

“Risk culture should be reimagined as a matter of integrity and a steadfast opposition to hubris and narcissistic traits.”

Anthony Asher, Victoria Clout and Tracy Wilcox
Paper presented to the Actuaries Institute Financial Services Forum, Sydney, May 2014.

“Reports on the larger financial failures of recent times (of which we have referred to HIH, NAB and the Equitable) invariably blame poor culture and dominant personalities, which we interpret largely as a failure of virtue – not formal risk management processes.

“With this in mind, we have sought to move ‘beyond regulation’ and back to the essence of good risk management.

“In this paper we have suggested that risk culture should be reimagined as a matter of integrity and a steadfast opposition to hubris and narcissistic traits. If it is indeed a matter of integrity, justice, diligence and prudence, we suggest that the development of detailed rules has long been known as a very poor way to develop these virtues. Indeed it displays certain hubris on the part of regulators that they should even try.”

Access the full paper here: Virtue, hubris and risk culture.