Frontiers of Risk Management, Volume I

CHAPTER 3

Risk Management and Corporate Finance

Frank Moxon

Evolution Securities Limited

Introduction

It is tempting in today’s heavily regulated securities industry to think that risk is something to be eliminated or avoided in order both to achieve full regulatory compliance and maximize profitability. All business activities, however, involve some degree of risk and most entrepreneurial managers, at least, acknowledge that risks often need to be taken in order to gain a competitive advantage or to secure higher financial returns. Among the issues, therefore, facing senior management in any business enterprise are:

• the identification of key risks within the business;
• the establishment of an effective risk management and reporting system to ...