Abstract
The finance literature describes risk management as being concerned with identing and managing a firm’s exposure to financial risk. Corporate Governance is often described as the set of rules, structures and procedures by which investors assure themselves of getting a return on their investment and ensure that mangers do not misuse the investors’ funds. This essay addresses the connection between risk management, corporate governance and the modern corporation. We argue that risk management and risk management products help ensure the survival of the firm and thereby support broad public policy objectives — objectives beyond the immediate interests of the owners of the company and a narrow financial objective of shareholder wealth maximization.
This is a preview of subscription content, log in via an institution to check access.
Access this chapter
Tax calculation will be finalised at checkout
Purchases are for personal use only
Preview
Unable to display preview. Download preview PDF.
References
Berle, Adolph.A. Jr.; Means, Gardiner C. (1933): „The Modern Corporation and Private Property”, New York, Macmillan Co.
Damodaran, Aswath (1977): „Corporate Finance: Theory and Practice”, New York, John Wiley and Sons, Inc.
Durand, David (1989): „Afterthoughts on a Controversy with MM, Plus New Thoughts on Growth and the Cost of Capital”, Financial Management 18, 12–18.
Dyer, J. H.; Singh, H. (1998): „The Relational View: Cooperative Strategy and Sources of Interorganizational Competitive Advantage”, Academy of Management Review, 23, 660–679.
Fama, Eugene F. (1970): „Efficient Capital Markets: A Review of Theory and Empirical Work”, Journal of Finance 25, 383–417.
Froot, Kenneth; Scharfstein, David; Stein, Jeremy (1993): „Risk Management: Coordinating Corporate Investment and Financing Policies”, Journal of Finance 48, 1629–1658.
Grinblatt, Mark; Titman, Sheridan (1998): „ Financial Markets and Corporate Strategy”, Boston, Irwin/McGraw-Hill.
Hopt, Klaus J.; Kanda, Hideki; Roe, Mark J.; Wymeersch, Eddy; Prigge, Stefan (1998): „Comparative Corporate Governance: The State of the Art and Emerging Research “, Oxford, Clarendon Press.
Jensen, Michael C. (1986): „Agency Costs of Free Cash Flow, Corporate Finance and Takeovers”, American Economic Review 76, 323–329.
Jensen, Michael C.; Meckling, William (1976): „Theory of the Firm: Managerial Behavior, Agency Costs and Ownership Structure”, Journal of Financial Economics 3, 305–60.
Jensen, Michael C.; Smith, Jr., Clifford W. (1984): „The Modern Theory of Corporate Finance”, New York, McGraw-Hill.
Kaen, Fred R.; Kaufman, Allen; Zacharias, Lawrence (1988): „American Political Values and Agency Theory: A Perspective”, Journal of Business Ethics 7, 805–820.
Kaufman, Allen; Zacharias, Lawrence (1992): „From Trust to Contract: The Legal Language of Managerial Ideology, 1920–1980”, Business History Review 66, 547–559.
Kaufman, Allen; Zacharias, Lawrence; Karson, Marvin (1995): „Managers vs. Owners: The Struggle for Corporate Control in American Democracy”, New York: Oxford University Press.
Kennedy, David M. (1999): „Freedom From Fear: The United States, 1929–1945”, Oxford History of the United States, Vol. 9: Oxford, Oxford University Press.
Lintner, John (1965): „Security Prices, Risk, and Maximal Gains from Diversification”, Journal of Finance 20, 587–615.
Mandelbrot, Benoit (1966): „Forecasts of Future Prices, Unbiased Markets, and Martingale Models”, Journal of Business 39, 242–255.
Markowitz, Harry (1959): „Portfolio Selection”, New Haven, Yale University Press.
Miller, Merton; Modigliani, Franco (1961): „Dividend Policy, Growth and the Value of Shares”, Journal of Business 34, 411–433.
Modigliani, Franco; Miller, Merton (1959): „The Cost of Capital, Corporation Finance and The Theory of Investment”, American Economic Review 53, 261–297.
Ross, Stephen A. (1973): „The Economic Theory of Agency: The Principals’ Problems”, American Economic Review 63, 134–139.
Samuelson, Paul (1965): „Proof that Properly Anticipated Prices Fluctuate Randomly”, Industrial Management Review 6, 41–49
Sharp, William (1964): „Capital Asset Prices: A Theory of Market Equilibrium Under Conditions of Risk”, Journal of Finance 19, 425–442.
Shleifer, Andrei and Robert W. Vishney (1997): „A Survey of Corporate Governance”, Journal of Finance 52, 737–783.
Smith, Clifford, and Rene Stulz (1985): „The Determinants of Firms’ Hedging Policies”, Journal of Financial and Quantitative Analysis 20, 391–405.
Williamson, Oliver E. (1985): „The Economic Institutions of Capitalism”, New York, The Free Press.
Author information
Authors and Affiliations
Editor information
Editors and Affiliations
Rights and permissions
Copyright information
© 2000 Springer-Verlag Berlin Heidelberg
About this chapter
Cite this chapter
Kaen, F.R. (2000). Risk Management, Corporate Governance And the Modern Corporation. In: Frenkel, M., Hommel, U., Rudolf, M. (eds) Risk Management. Springer, Berlin, Heidelberg. https://doi.org/10.1007/978-3-662-04008-9_14
Download citation
DOI: https://doi.org/10.1007/978-3-662-04008-9_14
Publisher Name: Springer, Berlin, Heidelberg
Print ISBN: 978-3-662-04010-2
Online ISBN: 978-3-662-04008-9
eBook Packages: Springer Book Archive