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Risk Management, Corporate Governance, and the Search for Long-Term Investors
Journal article   Open access   Peer reviewed

Risk Management, Corporate Governance, and the Search for Long-Term Investors

Scott Bauguess, Jim Dunigan, Damien Park, Patrick McGurn, Don Chew and Ralph Walkling
JOURNAL OF APPLIED CORPORATE FINANCE, v 22(4), pp 58-74
01 Sep 2010
DOI: https://doi.org/10.1111/j.1745-6622.2010.00302.x
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https://doi.org/10.1111/j.1745-6622.2010.00302.xView
Published, Version of Record (VoR)Maybe Open Access (Publisher Bronze),  Open

Abstract

Business & Economics Business, Finance Social Sciences
This discussion explores a number of ways that more effective risk management, corporate governance, and communication with investors can help companies increase their efficiency and long-run value. According to one of the panelists, recent surveys of corporate directors suggest that companies should devote more time and attention to three issues-strategy, risk management, and succession planning-and that strategy and risk are the "flipsides of the same coin." As the panelist argues, "You can't talk about strategy without talking about what risks you're going to take-and what risks you decide to take has to depend on the core competencies that drive the corporate strategy." In addition to making risk management a critical part of corporate strategy, another notable recommendation is to communicate a company's strategy and business plan as clearly as possible to investors, with the aim of attracting more sophisticated, long-term shareholders. Contrary to popular belief, such a group may well include some hedge funds and other activist shareholders. According to a newly released report on shareholder activism (produced and cited by another panelist), corporate boards should work harder to identify and engage the "largest 10 shareholders in the organization," with the ultimate goal of cultivating a shareholder base that buys into the company's strategy.

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Collaboration types
Industry collaboration
Domestic collaboration
Web of Science research areas
Business, Finance
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