Perceptions of risk culture in a South African electricity utility : risk practitioners versus business managers
Abstract
Risk culture is considered a crucial enabling factor for effective risk management. The ability of
an organisation’s risk community to predict hindrances to achieving their objectives is the very
basis of fostering risk culture. Risk-culture-related behavioural factors play an important role in
optimising the use of risk management structures. The purpose of this study was to investigate
how risk culture is perceived by an electricity utility’s risk practitioners and business managers.
A risk culture scale (UARM RCS-2019) was used to compare the perceptions of risk culture
between these two groups, and provide diagnostic indications of what the organisation can do
to improve its risk culture. The scale was completed by 112 risk practitioners and 47 business
managers. Unexpectedly, no statistically significant differences were found between the risk
culture perceptions of the two groups. These results are discussed, taking the sample
demographics into account. Participants indicated the following areas of risk culture
improvement for the utility: leadership and accountability; quality of risk-related information,
shared understanding of risk and risk communication. This study provides an example of novel
and practical ways in which the utility’s management can address the challenges of measuring
risk culture, allowing them to improve the organisation’s risk culture. In addition, the academic
literature on risk culture is limited, with the available literature mainly focusing on the financial
sector. No risk-culture-related articles could be found relating to the electricity sector. Therefore,
another contribution of this study is to illustrate how risk culture can be evaluated in the public
sector.