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Integrated Risk Management for the Firm: A Senior Manager's Guide

39 Pages Posted: 26 Feb 2002  

Lisa K. Meulbroek

Claremont McKenna College - Robert Day School of Economics and Finance

Date Written: February 20, 2002

Abstract

This paper is intended as a risk management primer for senior managers. It discusses the integrated risk management framework, emphasizing the connections between the three fundamental ways a company can implement its risk management objectives: modifying the firm's operations, adjusting its capital structure, and employing targeted financial instruments. "Integration" refers both to the combination of these three risk management techniques, and to the aggregation of all risks faced by the firm. The paper offers a functional analysis of integrated risk management using a wide set of illustrative situations to show how the risk management process influences, and is influenced by, the overall business activities and the strategy of the firm. Finally, the paper provides a risk management framework for formulating and designing a risk management system for the firm, concluding with a perspective on the future evolution of risk management.

Keywords: Risk management, integrated risk management, enterprise risk management

JEL Classification: G30, G32, G13

Suggested Citation

Meulbroek, Lisa K., Integrated Risk Management for the Firm: A Senior Manager's Guide (February 20, 2002). Available at SSRN: https://ssrn.com/abstract=301331 or http://dx.doi.org/10.2139/ssrn.301331

Lisa K. Meulbroek (Contact Author)

Claremont McKenna College - Robert Day School of Economics and Finance ( email )

500 E. Ninth St.
Claremont, CA 91711-6420
United States
909-607-7363 (Phone)

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