Roads to Resilience

In order to achieve an integrated approach to resilience, an organisation needs to empower all stakeholders to engage with the risk management and resilience agenda. For example, the boxed extract from the AIG case study set out below provides an insight into how open disclosure of risk information benefits strategy. AIG demonstrates that an open and supportive culture enhances resilience and ensures that management of risk is recognised as a shared responsibility.

Case study: AIG – open disclosure benefits strategy

The company has an open and supportive culture where employees are urged to “ put your hand up” to ask for help. “for a young person coming in, (I was one of those 15 years ago) I was told if you’ve made a mistake, you’ve come across something, put your hand up, ask for help, ask questions ” (Executive Director, Commercial Lines Division). It is acceptable behaviour for employees to ask questions of those above them; they are strongly encouraged to ask difficult questions and to raise concerns about possible problems. There is an acceptance at the senior levels in the organisation that asking difficult or embarrassing questions is beneficial (rather than just tolerating issues out of politeness): “ … the more questions you have, the more you can learn and the less gaps you have, so even if they think they are embarrassing it is absolutely correct to put them on the table ” (Managing Director, UK). The open discursive culture provides an environment “ where people can challenge others, where people can challenge themselves, they can challenge our management, they expect to be challenged by their management and then they can report openly on what’s going on because they realise that open disclosure is generating a benefit to the overall strategy and to the whole company ” (Managing Director, UK).

The culture of the organisation is people centred: “ Each time I see someone who has just been appointed a new manager, each time I’m talking to someone who is probably going to be appointed as a manager, I ask them the same question: ‘What do you think is your biggest responsibility?’. Invariably the person will say making sure that I’m going to deliver whatever is going to be the budget for next year. And I say: ‘Business is key but your primary responsibility is that you are now in charge of your people … you’re in charge of the safety and security of your people and only when you are comfortable with that can you start doing your business as a manager’. ” (Managing Director, UK). This attitude and the open supportive culture help to explain why the employees are engaged, they feel they are a valued part of the organisation. Risk management is considered to be everybody’s job, it is everybody’s obligation rather than the responsibility of the risk management function: “ … everybody is managing all the risks all the time … risk is everybody’s business and we just push that every time we can, it is everybody throughout the organisation who is involved ” (Chief Risk Officer). For more insights into resilience at AIG, refer to the full case study in Appendix A

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Section 8: Implications for Board Members