internal environment
The internal environment of an organization is determined by the tone at the top which influences the risk consciousness of people. Important factors that influence the internal environment are the role of board of directors, organization culture, risk management philosophy and organization structure. Ethical values and management integrity are also by-products of the organization culture. Board of Directors The board of directors together with the Chief Executive Officer has key roles in determining the corporate culture. Citibank’s (Citi) board in 2007 was made up of 14 directors with 11 of them being independent. The directors also had relevant experiences and stature, therefore ensuring appropriate checks and balances on the management. The board, was on surface, a working and effective board. However, the board was in substance, ineffective in scrutinizing management activities. They had placed too much trust on Robert E. Rubin, then top advisor to both Charles O.