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The definitions of Financial risk management
by 趙永祥, 2017-08-21 20:53, 人氣(30)

The definitions of Financial risk management 


Financial risk management is defined as the practices and procedures that a company uses to optimize the amount of risk it handles with its financial interests. 

Senior leaders of a company that practices financial risk management should produce a written policy on financial risks they are willing to accept and follow that policy. 

They should also monitor the risks taken, and release reports on the results of these risks to help with analyzing them.

In financial risk management, it is important that the financial risk management department and the employees who work within it are not supervised by those responsible for making the decisions for the company involving financial risk. This avoids risks of conflicts of interest between the financial risk management department and members of the board of directors or senior management who might try to influence policy with threatened or implied job actions if members of the department do not do what they are asked to do. 

Employees in the financial risk management department should not transfer to a department that makes the financial investment decisions for the company. This is another policy to avoid conflicts of interest.
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