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Definition: Behavioral Risk Management is a complimentary approach to the reactive, legal, and numbers-oriented compliance and risk management approach taken by various regulators following the 2008 financial crisis. It is a more pro-active, preventive and psychological approach to avoid misconduct by employees (and the company they work in). It involves identifying behavioral drivers and addressing these drivers and employee behavior by making changes or using nudges in processes or in organizational contexts. It is based on the assumption that people do not always act rationally. |
More on risk management: Credit Risk Management, Disaster Management, Event Chain Methodology, Operational Risk Management, Risk Appetite, more on risk management... MBA Brief provides concise yet precise definitions of organizational concepts, management methods, and business models as taught in an MBA program. We keep it short and provide links to high-quality websites where you can learn more about your topic.
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