Published by:
Harvard Business Publishing
Length: 8 pages
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Abstract
The use of derivatives--a broad term referring to such diverse instruments as futures, swaps, and options--has become increasingly popular in recent years as corporations look for new and better ways to manage risk. The high-profile losses of Procter & Gamble, Metallgesellschaft, and other companies are sending an important signal to senior managers: financial decisions that were previously designed and implemented by specialists need to be monitored more closely from the very top of organizations. In "Framework for Risk Management" (November- December 1994), Kenneth A. Froot, David S. Scharfstein, and Jeremy C. Stein present a guide for helping managers develop a coherent risk- management strategy. This issue''s Perspectives section opens up the discussion on derivatives to a group of experts.
About
Abstract
The use of derivatives--a broad term referring to such diverse instruments as futures, swaps, and options--has become increasingly popular in recent years as corporations look for new and better ways to manage risk. The high-profile losses of Procter & Gamble, Metallgesellschaft, and other companies are sending an important signal to senior managers: financial decisions that were previously designed and implemented by specialists need to be monitored more closely from the very top of organizations. In "Framework for Risk Management" (November- December 1994), Kenneth A. Froot, David S. Scharfstein, and Jeremy C. Stein present a guide for helping managers develop a coherent risk- management strategy. This issue''s Perspectives section opens up the discussion on derivatives to a group of experts.