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Article
Publication date: 20 August 2018

Ruchi Agarwal and Sanjay Kallapur

The purpose of this study is to explore the best practices for improving risk culture and defining the role of actors in risk governance.

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Abstract

Purpose

The purpose of this study is to explore the best practices for improving risk culture and defining the role of actors in risk governance.

Design/methodology/approach

This paper presents an exemplar case of a British insurance company by using a qualitative case research approach.

Findings

The case study shows how the company was successful in changing from a compliance-based and defensive risk culture to a cognitive risk culture by using a systems thinking approach. Cognitive risk culture ensures that everybody understands risks and their own roles in risk governance. The change was accomplished by adding an operational layer between the first and second lines of defense and developing tools to better communicate risks throughout the organization.

Practical implications

Practitioners can potentially improve risk governance by using the company’s approach. The UK regulator’s initiative to improve risk culture can potentially be followed by other regulators.

Originality/value

This is among the few studies that describe actual examples of how a company can improve risk culture using the systems approach and how systems thinking simultaneously resolves several other issues such as poor risk reporting and lack of clarity in roles and responsibilities.

Details

The Journal of Risk Finance, vol. 19 no. 4
Type: Research Article
ISSN: 1526-5943

Keywords

Article
Publication date: 1 March 2001

Sanjay Kallapur and Mark A. Trombley

Explains the concept of the investment set (IOS: i.e. chances to invest for expansion, new products, cost reduction etc.) and its effects on firm value. Reviews previous research…

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Abstract

Explains the concept of the investment set (IOS: i.e. chances to invest for expansion, new products, cost reduction etc.) and its effects on firm value. Reviews previous research on the theoretical relationships between IOS and optimal contracting resulting from shareholder/debtholder conflict, agency costs and performance measurement problems; and empirical research on its links with company policy on financing, dividends and compensation. Goes on to discuss research on measuring IOS by using various proxies; and summarizes the main findings.

Details

Managerial Finance, vol. 27 no. 3
Type: Research Article
ISSN: 0307-4358

Keywords

Article
Publication date: 1 December 2001

Fouad AlNajjar and Ahmed Riahi‐Belkaoui

Uses previous research on firms’ potential investment (i.e. growth) opportunities, profitability and political cost/risk to suggest that a high level of growth opportunities may…

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Abstract

Uses previous research on firms’ potential investment (i.e. growth) opportunities, profitability and political cost/risk to suggest that a high level of growth opportunities may encourage managers to use income reducing accruals. Tests this on 1987‐1990 data from a sample of US multinationals classified into high or low growth groups. Explains the methods used to estimate discretionary accruals and to measure the investment opportunity set. Presents the results which suggest that discretionary accruals are higher in high growth firms; and support the political cost hypothesis of Watts and Zimmerman (1978) and the political risk hypothesis of Monti‐Belkaoui et al (1999)

Details

Managerial Finance, vol. 27 no. 12
Type: Research Article
ISSN: 0307-4358

Keywords

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