Purchase - $10.00

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

19 Pages Posted: 3 Jan 2011  

Ralph A. Walkling

Drexel University - Lebow College of Business

Scott W. Bauguess

US Securities & Exchange Commission

Jim Dunigan

affiliation not provided to SSRN

Damien Park

Hedge Fund Solutions, LLC

Patrick McGurn

affiliation not provided to SSRN

Don Chew

affiliation not provided to SSRN

Date Written: December 23, 2010

Abstract

This discussion explores a number of ways that more effective risk management, corporate governance, and communication with investors can help companies increase their effciency 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.

Suggested Citation

Walkling, Ralph A. and Bauguess, Scott W. and Dunigan, Jim and Park, Damien and McGurn, Patrick and Chew, Don, Risk Management, Corporate Governance, and the Search for Long-Term Investors (December 23, 2010). Journal of Applied Corporate Finance, Vol. 22, Issue 4, pp. 58-74, 2010. Available at SSRN: https://ssrn.com/abstract=1733801 or http://dx.doi.org/10.1111/j.1745-6622.2010.00302.x

Ralph Walkling

Drexel University - Lebow College of Business ( email )

LeBow College of Business
Philadelphia, PA 19104
United States
(215) 895-4920 (Phone)
(215) 895-6119 (Fax)

Scott Bauguess (Contact Author)

US Securities & Exchange Commission ( email )

100 F Street, NE
Washington, DC 20549
United States
(202) 551-6660 (Phone)

Jim Dunigan

affiliation not provided to SSRN

No Address Available

Damien Park

Hedge Fund Solutions, LLC ( email )

106 Yeakel Avenue
Erdenheim, PA 19038
United States

HOME PAGE: http://www.hedgerelations.com

Patrick McGurn

affiliation not provided to SSRN

Don Chew

affiliation not provided to SSRN

No Address Available

Paper statistics

Downloads
3
Abstract Views
706