Risk culture reflects how employees at all levels understand their risk responsibilities, communicate concerns, and make risk-aware decisions in daily operations. A strong risk culture encourages transparency, accountability, and informed risk-taking aligned with strategic objectives. Poor risk culture contributed to major failures like the 2008 financial crisis, where short-term gains were prioritized over long-term stability. Leaders shape culture through tone-at-the-top, incentive structures, and consequences for risk policy violations. Regular culture assessments through surveys and behavioral observations help identify gaps between stated policies and actual practices.