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Does executive accountability enhance risk management and risk culture?

Author

Listed:
  • Elizabeth Sheedy
  • Dominic S. B. Canestrari‐Soh

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.

Suggested Citation

  • Elizabeth Sheedy & Dominic S. B. Canestrari‐Soh, 2023. "Does executive accountability enhance risk management and risk culture?," Accounting and Finance, Accounting and Finance Association of Australia and New Zealand, vol. 63(4), pages 4093-4124, December.
    • Handle: RePEc:bla:acctfi:v:63:y:2023:i:4:p:4093-4124
    DOI: 10.1111/acfi.13087
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    References listed on IDEAS

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