Enterprise Risk Management: Theory and Practice

33 Pages Posted: 4 Aug 2006  

Brian W. Nocco

Nationwide Insurance

René M. Stulz

Ohio State University (OSU) - Department of Finance; National Bureau of Economic Research (NBER); European Corporate Governance Institute (ECGI)

Multiple version iconThere are 2 versions of this paper

Date Written: July 2006

Abstract

In this paper, we explain how enterprise risk management creates value for shareholders. In contrast to the existing finance literature, we emphasize the organizational benefits of risk management. We show how a firm should choose its risk appetite and measure risk when implementing enterprise risk management. We also provide an extensive guide to the implementation issues faced by firms that implement enterprise risk management.

JEL Classification: G20, G21, G22, G30, G32, G34

Suggested Citation

Nocco, Brian W. and Stulz, René M., Enterprise Risk Management: Theory and Practice (July 2006). Available at SSRN: https://ssrn.com/abstract=921402 or http://dx.doi.org/10.2139/ssrn.921402

Brian W. Nocco

Nationwide Insurance ( email )

One Nationwide Plaza, 1-19-02
Columbus, OH 43215-2220

Rene M. Stulz (Contact Author)

Ohio State University (OSU) - Department of Finance ( email )

2100 Neil Avenue
Columbus, OH 43210-1144
United States

HOME PAGE: http://www.cob.ohio-state.edu/fin/faculty/stulz

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

European Corporate Governance Institute (ECGI)

c/o ECARES ULB CP 114
B-1050 Brussels
Belgium

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