RISK MANAGEMENT, CORPORATE GOVERNANCE AND SUSTAINABLE DEVELOPMENT

Abstract

Financial management implies a complex and extensive area of interest with deep connections with financial analysis, corporate finance and risk management. Thus, risk management is an integrative part of the financial management, referring to the set of actions and strategies performed in order to cover the risks incurred by various dimensions of the company activity. Financial management and, implicitly, risk management, involves an oversight responsibility of the Board. In fact, the Board is in charge with the monitoring of the effectiveness implied by risk management strategies and practices, resulting that the connector between financial management and corporate governance consists of the corporate risk management.

The paper starts with general aspects on corporate risk management as support to company’s value, which sets forth the scope of the issues the paper discusses. It briefly describes why Board of Directors involvement in the company strategies is directly related with firm performance. Next, by reviewing the general evidence, the paper explores why corporate governance may matter for sustainable development.