Finance theory does not provide a comprehensive framework for explaining risk management within the imperfect financial … environment in which firms operate. Corporate managers, however, rank risk management as one of their most important objectives … literature and analyses the implications for risk management practice. It is distinguished between two competing approaches to …

Finance theory does not provide a comprehensive framework for explaining risk management within the imperfect financial … environment in which firms operate. Corporate managers, however, rank risk management as one of their most important objectives … literature and analyses the implications for risk management practice. It is distinguished between two competing approaches to …

-off between improving information sharing between the board and management and reducing distortions in decision-making arising out … of managerial agency. We draw a distinction between the alignment of preferences of the board with management (which … affects information flows) and the allocation of authority to the board or management (which affects ex-post decisions). We …