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.