News: Do you need a cultural health check?

Organisations should give their staff personality tests to prevent scandals and disasters such as Libor rate-fixing and the Gulf of Mexico oil spill, according to two sets of guidance issued by the Institute of Risk Management.

Key people should undergo psychometric testing in order to gauge an organisation’s ‘health’ and prevent or mitigate corporate meltdowns, according to the IRM. It blamed flawed risk cultures for international scandals and disasters such as Libor-fixing, Deepwater Horizon, Enron’s collapse, the closure of the News of the World and abuse of MPs expenses.

“Airline pilots are routinely given personality tests to determine how effectively they can exhibit self-control under stress – we should be ready to look at other key staff, managers and board members in the same way”, the guidance says.

The documents, Risk culture: resources for practitioners, and Risk culture: under the microscope – guidance for boards, follow nine months of research and consultation with international risk experts on the root causes of organisational underperformance.