The Adoption and Diffusion of Risk Governance Structures and Practices

Risk governance is emerging as a topic of interest for practitioners, researchers, and policy-makers. Organization leaders—particularly senior executives and board members—continue to struggle to implement appropriate risk governance structures and practices. Examining the rationales and approaches prevalent among early-adopter organizations provides insight for others. This report presents a new theory of organizational risk governance, based on data drawn from eight Canadian organizations across four sectors: financial services, energy/utilities, telecommunications, and government. The nature of uncertainty and risk is the primary driver and differentiator for adoption and diffusion. Environments dominated by complexity result in a more incremental coordination orientation, while those dominated by change result in a more radical control orientation. Success factors include following a logical phased approach, re-inventing or customizing structures and practices, demonstrating valued outcomes, building and sustaining leadership support, dedicating resources to implementation, and engaging employees during implementation.