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Supervision – culture and behaviour

Every organisation has its own organisational culture and operates under a set of rules, which are very often only implied, and which decisively affect group dynamics and also the individual behaviour of its staff. 

No corporate culture is right or wrong. However, group dynamics and pathological individual behaviours are material sources of risk, particularly when occurring within the institutions’ management and internal supervision bodies (including the supervisory body and the non-executive members of the management body) and senior management, in view of the crucial role played by leaders in defining corporate culture.

Institutions are responsible for ensuring that, on top of formal governance structures, their culture promotes values consistent with sound and prudent management.

Institutions must be able to assess risk arising from their culture.  

As a prudential supervisory authority, Banco de Portugal monitors and assesses the risks arising from culture and behaviour in the supervised institutions, adopting the measures deemed appropriate, with a view to promoting a sound, prudent and responsible attitude towards risk. 

Supervision by Banco de Portugal does not release institutions and, especially, their management and internal supervision bodies from the responsibility of ensuring sound and prudent management.