Why your Chief Risk Officer needs a people-first risk strategy
To follow compliance, Chief Risk Officers have to invest significant resources in governance frameworks and risks registration. These requirements are the foundation and allows organisations to tick the boxes and make sure their teams know what steps to follow or action to take when the disruption happen.
At Ceicia the question we raise is: are you sure your teams are ready to follow processes and manage disruptions efficiently?
Every risk framework ultimately depends on people to recognise risk, interpret information, apply controls, communicate concerns and their ability to make decisions under pressure.
The above explain why a people-first risk strategy should not only be considered but be part of the Chief Risk Officer’s agenda.
Looking at the current risk framework, Cécile Lammer, the founder of Ceicia, can see how this human dimension is still underestimated by organisation. When an incident occurs, organisations would first think of strengthening processes without examining whether leadership behaviour, communication, accountability, organisational culture or decision-making contributed to the conditions in which the failure developed.
This approach omit one essential parameter the role of the people in the risk anticipation.
Risk management already recognises the human factor
International risk-management standards increasingly recognise that effective risk management cannot be separated from organisational culture and human behaviour.
ISO 31000 specifically identifies human and cultural factors as considerations in effective risk management and emphasises that risk management should be integrated into organisational governance, strategy, values and culture.
A technically sophisticated risk framework can still be vulnerable if employees operate in silos or people hesitate to escalate concerns.
This is why Ceicia approaches risk through the relationship between People and Process.
The CRO needs visibility and receive correct information to manage risk effectively
One of the greatest challenges in operational risk management is identifying risk while it is still emerging.
Employees closest to operations often detect weak signals before they become visible through formal reporting.
However, having this information somewhere in the organisation is not the same as having the right people with the right information.
Research on employee voice has shown that when employees withhold concerns or information about problems, organisations are deprived of potentially strategic knowledge.
For the CRO, this creates a fundamental question: Does the organisation’s risk reporting reflect operational reality, or only the risks people are prepared to report?
Psychological safety is therefore a risk consideration
Organisations mistaken what psychological safety means. A people-first risk strategy requires attention on how people perceive the company culture, how they feel about communicating openly.
A people-first strategy exposes the compliance gap
At Ceicia, we follow the Presilience approach to describe the difference between having formal risk processes and possessing genuine operational risk capability as the compliance gap.
A people-first strategy therefore does not replace traditional risk management. It strengthens the human infrastructure on which traditional risk management depends.
People-first does not mean people instead of process
The objective is not to transfer risk management into HR or to suggest that every operational failure is caused by people.
Operational risk emerges through interactions between people, processes, systems and external conditions. The CRO needs visibility across all of them.
From risk management to Presilience®
The mistake companies are often doing when preparing for risk is to only focus on identifying known risks and controlling exposure while they should strengthen the capability of their team to anticipate, adapt and act before disruption develops into crisis.
Ceicia, as an accredited Presilience® Partner, works at this intersection between risk, leadership, culture, decision-making and human behaviour.
Founder & Managing Director, Ceicia
Frequently Asked Questions
1- What is a people-first risk strategy?
A people-first risk strategy recognises that effective risk management depends on both People and Process. It considers how human behaviour, communication and decision-making influence operational risk.
2- Why should a Chief Risk Officer consider a people-first risk strategy?
Because risk frameworks only work if people can recognise, communicate and respond to emerging threats. A people-first approach helps CROs gain better visibility of operational reality.
3- What is the relationship between people risk and operational risk?
Operational risk is shaped by people, processes, systems and external conditions. Leadership, communication, accountability and culture can therefore directly influence an organisation’s risk exposure.
4- Why are processes and controls not enough?
Processes define what should happen, but people determine what happens in practice. Pressure, hierarchy and organisational culture can affect whether controls are followed and concerns are escalated.
5- How does psychological safety affect risk management?
Psychological safety influences whether employees feel able to report mistakes, raise concerns and challenge assumptions. Without it, important risk information may never reach leadership.
6- What is the compliance gap?
The compliance gap is the difference between having formal risk processes and being able to apply them effectively in real operational conditions.