A Corporate Governance Risk Manual

September 30th, 2010
| More
Contributed by: Aswath Damodaran
About a year ago, I agreed to do a series of seminars for the IFC, an arm of the World Bank that invests in privately owned businesses, primarily in emerging markets. The focus of the seminars was risk governance and the audience was directors in companies. While I was leery of getting entangled in the layers of bureaucracy that characterize the World Bank, I agreed to do it for two reasons. First, I had done the bulk of the work already in my book on Strategic Risk Taking (published by Wharton Press), published a couple of years ago. Second, I thought it would be interesting to talk about risk management, from a broader perspective.

Risk management, as practiced currently, is splintered among different disciplines. The risk hedging and measuring part has been taken over and reshaped by the finance folks, using numerical measures of risk such as beta and Value at Risk. The risk taking part has been hijacked by strategists, many of whom talk a good game, but are reluctant to put their ideas to any numerical test. Economists have largely sat out the debate, preferring to debate risk aversion in the rarefied world of utility functions. Statisticians have nipped at the edges, primarily pointing out what the rest of the crowd is doing badly.

I put together a presentation for a one-day seminar on risk management, from a corporate governance standpoint, and delivered it in four venues: Antigua (Caribbean), Bogota (Colombia), Lima (Peru) and St. Petersburg (Russia). I have turned over my slides for others to use in more venues, but my task is done. For closure, I decided to pull together the slides and create a manual for directors. While the IFC will be officially printing and distributing a variant of this manual, I want to make it available to anyone who wants it. You can download this manual by clicking here.

Page 1 of 2 Next >>
Related Article Tags: Shareholder Activists, Corporate Raiders and Proxy Battles; Hedge Fund Resources and Featured Partner News

More Recent Headlines

In Defense of Proxy Advisors

Abe and Jack Eisenstat’s Dabroes Management having an impressive 2010

Avenue Capital, KKR and Perella Weinberg Vying for Goldman Sachs Trading Unit

SEC charges Carlson Capital with violating short selling policies

Appaloosa Management’s David Tepper is bullish on Stocks

Ron Beller and Manal Mehta launch Branch Hill Capital

Capstone veteran Steven Yashar founds Cosyne Capital Management

Paul Tudor Jones is Not Making Investors Any Money

Shareholder Activist Ramius Capital finalizes agreement with Aviat, pressures SeaChange

Ivaldi Capital, backed by Citigroup, raises $500mm for launch