Have You Got the Risk Right? On Risk Appetite, Strategic Planning, and a Truly Holistic Approach to Risk Management

Alviniussen, Alf; Jankensgård, Håkan

doi:10.2139/ssrn.2233830

Cited by 2 publications

(1 citation statement)

References 4 publications

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“…Managers can then choose the policy that leads to the most attractive riskreturn trade-off given its risk appetite. As argued by Alviniussen and Jankensgård (2013), by implementing ERB a firm's risk management, financial planning and strategic decision-making become integrated processes.…”

Section: Box 6 Integrated Risk Modellingmentioning

confidence: 99%

Why FX Risk Management Is Broken–and What Boards Need to Know to Fix It

Jankensgård¹,

Alviniussen

Oxelheim

2016

J Applied Corp Finance

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In this paper we challenge the role of Foreign Exchange Risk Management (FXRM) in corporate management. We believe it is fair to characterize FXRM, on the whole, as a legacy activity rather than something that reflects a realistic cost-benefit analysis at the enterpriselevel. The Board of Directors, as the designated guardians of the interests of shareholders, has a key role in setting the firm on a path towards a cost-efficient and centralized FXRM that preserves the firm's transparency and predictability towards the investor community. A policy conclusion from our analysis is that responsibility for FX policy should shift from the traditional Finance/Treasury orientation to a group risk function (e.g. a Chief Risk Officer) supported by a risk committee dedicated to integrated risk management.

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Section: Box 6 Integrated Risk Modellingmentioning

confidence: 99%

Why FX Risk Management Is Broken–and What Boards Need to Know to Fix It

Jankensgård¹,

Alviniussen

Oxelheim

2016

J Applied Corp Finance

Self Cite

View full text Add to dashboard Cite

show abstract

Why FX Risk Management Is Broken - And What Boards Need to Know to Fix It

2015

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Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. Terms of use: Documents in EconStor may AbstractIn this paper we challenge the role of Foreign Exchange Risk Management (FXRM) in corporate management. We believe it is fair to characterize FXRM, on the whole, as a legacy activity rather than something that reflects a realistic cost-benefit analysis at the enterpriselevel. The Board of Directors, as the designated guardians of the interests of shareholders, has a key role in setting the firm on a path towards a cost-efficient and centralized FXRM that preserves the firm's transparency and predictability towards the investor community. A policy conclusion from our analysis is that responsibility for FX policy should shift from the traditional Finance/Treasury orientation to a group risk function (e.g. a Chief Risk Officer) supported by a risk committee dedicated to integrated risk management.

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Have You Got the Risk Right? On Risk Appetite, Strategic Planning, and a Truly Holistic Approach to Risk Management

Cited by 2 publications

References 4 publications

Why FX Risk Management Is Broken–and What Boards Need to Know to Fix It

Why FX Risk Management Is Broken–and What Boards Need to Know to Fix It

Why FX Risk Management Is Broken - And What Boards Need to Know to Fix It

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