Enterprise-Wide Risk Management and Corporate Governance

24 Pages Posted: 13 Aug 2010

See all articles by Betty J. Simkins

Betty J. Simkins

Oklahoma State University - Stillwater - Department of Finance

Steven A. Ramirez

Loyola University of Chicago School of Law

Date Written: March 1, 2008

Abstract

Enterprise-wide risk management is emerging as an empirically tested means of managing the full spectrum of risk throughout the business enterprise. This article reviews the history and best learning regarding enterprise-wide risk management. It concludes that enterprise-wide risk management can enhance the financial performance of the firm as well as the ability of capital markets to respond to risk, but that,unfortunately, corporate governance standards are unlikely to evolve in accordance with this learning. Thus, the subprime meltdown demonstrates that too often firms ignore learning regarding the best means of managing risk. This article therefore suggests enhanced disclosure mandates regarding firm practices in connection with risk management as a means of facilitating enterprise-wide risk management practices.

JEL Classification: G3, G38, K22

Suggested Citation

Simkins, Betty J. and Ramirez, Steven A., Enterprise-Wide Risk Management and Corporate Governance (March 1, 2008). Loyola University Chicago Law Journal, Vol. 39, 2008. Available at SSRN: https://ssrn.com/abstract=1657036

Betty J. Simkins

Oklahoma State University - Stillwater - Department of Finance ( email )

336 Business Building
Stillwater, OK 74078-4011
United States
405-744-8625 (Phone)
405-744-5180 (Fax)

HOME PAGE: http://spears.okstate.edu/~simkins

Steven A. Ramirez (Contact Author)

Loyola University of Chicago School of Law ( email )

25 E. Pearson
Chicago, IL 60611
United States

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