The influence of key risk indicators on managers’ behaviour within the financial industry in South Africa
Date
2012-09-10
Authors
McCabe, Tracie Lee
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Abstract
There is currently no significant research that explores the influence that key risk indicators (KRIs) have on managers‟ goal setting behaviours in the financial industry in South Africa. A tremendous amount of research has been conducted on both KRIs as a formal operational risk monitoring tool and on managers‟ goal setting behaviours; however, there is limited literature that explores this relationship. As a result, senior management and Operational Risk Managers are unaware of the constructs that affect this dynamic which limits their ability to cultivate or maintain an acceptable risk profile, one which would propel an organisation forward in its pursuit to remain sustainable and profitable while also adhering to regulatory obligations.
This research report aims to provide clarity to senior management and Operational Risk Managers on the influence that KRIs have on managers‟ goal setting behaviours.
A manifest and content analysis was conducted on the responses obtained from an in-depth semi-structured interview process. It involved 15 respondents who were all managers responsible for the management of KRIs within their respective business units at Investec Bank Limited. The constructs identified during the literature review were explored to provide an understanding of their influence the KRIs and on managers‟ subsequent goal setting behaviours.
The research findings indicated that some constructs considered had an influence on managers‟ KRI process and goal setting behaviours. All constructs are discussed in depth in Chapter four of this research report.
The key message of this report is that financial institutions should continuously consider all the constructs that were investigated and align their internal KRI process. This is to ensure they reap the full benefits of the ORM process in their quest to manage their risk profiles more effectively. The findings of this research report will assist managers in leveraging their risk management tool to better manage organisational risk profiles. By realising the full benefits of a sophisticated risk management framework, all depositors, debtors, shareholders and clients are protected and the stability and effectiveness of the financial system considerably enhanced
Description
MBA Thesis (WBS)
Keywords
Management, Financial industry, Key risk factors