56. A strong risk culture should include but is not necessarily limited to: a. Tone from the top …

A strong risk culture should include but is not necessarily limited to:

• a. Tone from the top: the management body should be responsible for setting and communicating the issuer’s core values and expectations. The behaviour of its members should reflect these values. The management body should contribute to the internal communication of core values and expectations to staff. Staff should act in accordance with all applicable laws and regulations and promptly escalate observed non-compliance within or outside the issuer (e.g. to the competent authority through a whistleblowing process).
• b. Accountability: relevant staff at all levels should know and understand the core values of the issuer of ARTs and, to the extent necessary for their role and its risk tolerance and appetite. They should be capable of performing their roles and be aware that they will be held accountable for their actions in relation to the issuer of ARTs ’ risk-taking behaviour.
• c. Effective communication and challenge: a sound risk culture should promote an environment of open communication and effective challenge in which decision-making processes encourage a broad range of views, allow for testing of current practices, stimulate a constructive critical attitude among staff and promote an environment of open and constructive engagement throughout the entire organisation.
• d. Incentives: appropriate incentives should play a key role in aligning risk-taking behaviour with the issuer of ARTs ’ risk profile and its long-term interests in particular for issuers of significant ARTs.

1. Overview

1.1 References

1.2 Identified Requirements

1.3 Related Standards

2. Identified Requirements

3. Related Standards

• EBA - Published by the European Banking Authority at https://www.eba.europa.eu/