{"id":{"repo_id":"vt","oai_identifier":"oai:vtechworks.lib.vt.edu:10919/31910"},"canonical_url":"https://search.dev.ndltd.org/etd/vt/oai:vtechworks.lib.vt.edu:10919/31910","repository":{"repo_id":"vt","name":"Virginia Tech","base_url":"https://vtechworks.lib.vt.edu/oai/request"},"display":{"title":"Rational Corporate Risk Management Policy: An Extension of Traditional Risk Management Theory to Incorporate Observed Managerial Behavior","abstract":"There is qualitative and anecdotal evidence that corporate management deviates from received risk management theory. These deviations include: an overall hesitancy to accept projects with greater levels of total risk, increased return requirements compensating for firm-specific risk, employment of hedging strategies, the insuring of diversifiable risks, corporate diversification outside of the industry constraint, and the utilization of portfolio and other variance reducing methods. The literature primarily contributes these behaviors to principal/agent conflicts. Evidence from studies on these deviations support strong arguments based in resource scarcity, cost and availability of capital, employee/community stability, and the increases in bankruptcy costs that these risk management deviation are in the interest of shareholders. When considered in the context of the long-term impact on value, the observed deviations from received corporate risk management theory contribute substantively to the perpetuation of the firm as a long-term store of value. This paper supports two hypotheses: (1) the deviation from received risk management theory by corporate managers is broadly practiced, and (2) these deviations are generally in the interest of shareholders.","abstract_html":"There is qualitative and anecdotal evidence that corporate management deviates from received risk management theory. These deviations include: an overall hesitancy to accept projects with greater levels of total risk, increased return requirements compensating for firm-specific risk, employment of hedging strategies, the insuring of diversifiable risks, corporate diversification outside of the industry constraint, and the utilization of portfolio and other variance reducing methods. The literature primarily contributes these behaviors to principal/agent conflicts. Evidence from studies on these deviations support strong arguments based in resource scarcity, cost and availability of capital, employee/community stability, and the increases in bankruptcy costs that these risk management deviation are in the interest of shareholders. When considered in the context of the long-term impact on value, the observed deviations from received corporate risk management theory contribute substantively to the perpetuation of the firm as a long-term store of value. This paper supports two hypotheses: (1) the deviation from received risk management theory by corporate managers is broadly practiced, and (2) these deviations are generally in the interest of shareholders.","abstract_has_math":false,"creators":["Roselle, Russell Paul"],"institution":"Virginia Tech","degree_name":"Master of Arts","degree_level":"masters","degree_discipline":"Economics","degree_department":"Economics","school":null,"contributors":[],"advisors":[],"committee_chairs":["Tideman, Nicolaus"],"committee_members":["Ashley, Richard A.","Ball, Sheryl B."],"year":2006,"date_issued":"2006-04-14","date_published":"2006-04-14","updated_at":"2026-07-22T22:20:38Z","subjects":["Corporate Risk Management","Return Requirements","Corporate Insurance and Hedging Policy","Corporate Capital Structure"],"languages":[],"rights":["In Copyright"],"rights_urls":["http://rightsstatements.org/vocab/InC/1.0/"],"identifier_entries":[{"key":"dc:identifier.other","label":"Dc Identifier Other","values":["etd-04252006-145221"],"render_values":[{"text":"etd-04252006-145221","href":null,"code":true}]}]},"links":{"outbound_url":"http://hdl.handle.net/10919/31910","outbound_label":"Handle","outbound_source":"dc:identifier.uri"},"metadata_groups":[{"id":"people","label":"People","entries":[{"key":"dc:contributor.committeechair","label":"Committee Chair","values":["Tideman, Nicolaus"]},{"key":"dc:contributor.committeemember","label":"Committee Member","values":["Ashley, Richard A.","Ball, Sheryl B."]},{"key":"dc:contributor.department","label":"Department","values":["Economics"]},{"key":"dc:creator","label":"Author","values":["Roselle, Russell Paul"]}]},{"id":"academic_context","label":"Academic Context","entries":[{"key":"dc:date.accessioned","label":"Dc Date Accessioned","values":["2014-03-14T20:34:16Z"]},{"key":"dc:date.available","label":"Dc Date Available","values":["2014-03-14T20:34:16Z","2006-05-22"]},{"key":"dc:date.issued","label":"Date","values":["2006-04-14"]},{"key":"dc:publisher","label":"Institution","values":["Virginia Tech"]},{"key":"dc:type","label":"Dc Type","values":["Thesis"]},{"key":"thesis:degree_discipline","label":"Discipline","values":["Economics"]},{"key":"thesis:degree_level","label":"Degree Level","values":["masters"]},{"key":"thesis:degree_name","label":"Degree Name","values":["Master of Arts"]},{"key":"thesis:institution_name","label":"Thesis Institution Name","values":["Virginia Polytechnic Institute and State University"]}]},{"id":"subjects_keywords","label":"Subjects and Keywords","entries":[{"key":"dc:subject","label":"Dc Subject","values":["Corporate Risk Management","Return Requirements","Corporate Insurance and Hedging Policy","Corporate Capital Structure"]}]},{"id":"language_rights","label":"Language and Rights","entries":[{"key":"dc:rights","label":"Dc Rights","values":["In Copyright"]},{"key":"dc:rights.uri","label":"Rights URI","values":["http://rightsstatements.org/vocab/InC/1.0/"]}]},{"id":"identifiers","label":"Identifiers","entries":[{"key":"dc:identifier.other","label":"Dc Identifier Other","values":["etd-04252006-145221"]},{"key":"dc:identifier.uri","label":"Identifier URI","values":["http://hdl.handle.net/10919/31910"]}]},{"id":"additional","label":"Additional Metadata","entries":[{"key":"dc:description.abstract","label":"Abstract","values":["There is qualitative and anecdotal evidence that corporate management deviates from received risk management theory. These deviations include: an overall hesitancy to accept projects with greater levels of total risk, increased return requirements compensating for firm-specific risk, employment of hedging strategies, the insuring of diversifiable risks, corporate diversification outside of the industry constraint, and the utilization of portfolio and other variance reducing methods. The literature primarily contributes these behaviors to principal/agent conflicts. Evidence from studies on these deviations support strong arguments based in resource scarcity, cost and availability of capital, employee/community stability, and the increases in bankruptcy costs that these risk management deviation are in the interest of shareholders. When considered in the context of the long-term impact on value, the observed deviations from received corporate risk management theory contribute substantively to the perpetuation of the firm as a long-term store of value. This paper supports two hypotheses: (1) the deviation from received risk management theory by corporate managers is broadly practiced, and (2) these deviations are generally in the interest of shareholders."]},{"key":"dc:description.degree","label":"Dc Description Degree","values":["Master of Arts"]},{"key":"dc:title","label":"Title","values":["Rational Corporate Risk Management Policy: An Extension of Traditional Risk Management Theory to Incorporate Observed Managerial Behavior"]}]}],"canonical_facts":{"dc:contributor.committeechair":["Tideman, Nicolaus"],"dc:contributor.committeemember":["Ashley, Richard A.","Ball, Sheryl B."],"dc:contributor.department":["Economics"],"dc:creator":["Roselle, Russell Paul"],"dc:date.accessioned":["2014-03-14T20:34:16Z"],"dc:date.available":["2014-03-14T20:34:16Z","2006-05-22"],"dc:date.issued":["2006-04-14"],"dc:description.abstract":["There is qualitative and anecdotal evidence that corporate management deviates from received risk management theory. These deviations include: an overall hesitancy to accept projects with greater levels of total risk, increased return requirements compensating for firm-specific risk, employment of hedging strategies, the insuring of diversifiable risks, corporate diversification outside of the industry constraint, and the utilization of portfolio and other variance reducing methods. The literature primarily contributes these behaviors to principal/agent conflicts. Evidence from studies on these deviations support strong arguments based in resource scarcity, cost and availability of capital, employee/community stability, and the increases in bankruptcy costs that these risk management deviation are in the interest of shareholders. When considered in the context of the long-term impact on value, the observed deviations from received corporate risk management theory contribute substantively to the perpetuation of the firm as a long-term store of value. 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