When Culture Becomes a Control — How Supervisors Are Shaping the Future of Operational Risk

In regulatory circles, culture is no longer an abstract concept. It’s a measurable, reportable, and enforceable risk factor—viewed not as a soft HR issue, but as a core element of operational control. Across Australia, Europe, the UK, and the United States, financial and non-financial regulators are making it clear: the management of culture and conduct is now fundamental to operational risk oversight.

This shift is transforming the way Operational Risk Management (ORM) functions are being evaluated. Regulators are demanding not only documentation of controls but evidence that organizations understand how risk culture shapes operational performance, compliance behavior, and escalation pathways. In response, forward-looking ORM programs are moving beyond control testing and loss event tracking. They are building integrated risk intelligence systems that can monitor, measure, and adapt to the human dynamics of risk.