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A global perspective on the use of derivatives for corporate risk management decisions

A global perspective on the use of derivatives for corporate risk management decisions Notes the “spectacular” growth of derivatives over the last 20 years and reviews previous research on the risk management policies and practices of corporations. Reports a survey of leading, non‐financial Canadian firms and compares it with previous studies. Shows the differences between respondents using/not using derivatives, the proportions of different types of treasury organization, the importance attached to treasury benchmarking and the integration of risk management policy with strategic plans. Finds that Canada uses derivatives more than Europe or the USA; that most Canadian and European treasuries operate as cost or service centres but are not benchmarked; that although most Canadian and European companies have written risk management policies, these are not integrated with financial/operating plans; that US risk managers are more likely to take positions reflecting their market views; and that in all the countries covered derivative users are larger than non‐users. Believes that most risk management programmes “remain in an introductory stage”. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Managerial Finance Emerald Publishing

A global perspective on the use of derivatives for corporate risk management decisions

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Publisher
Emerald Publishing
Copyright
Copyright © 2000 MCB UP Ltd. All rights reserved.
ISSN
0307-4358
DOI
10.1108/03074350010766567
Publisher site
See Article on Publisher Site

Abstract

Notes the “spectacular” growth of derivatives over the last 20 years and reviews previous research on the risk management policies and practices of corporations. Reports a survey of leading, non‐financial Canadian firms and compares it with previous studies. Shows the differences between respondents using/not using derivatives, the proportions of different types of treasury organization, the importance attached to treasury benchmarking and the integration of risk management policy with strategic plans. Finds that Canada uses derivatives more than Europe or the USA; that most Canadian and European treasuries operate as cost or service centres but are not benchmarked; that although most Canadian and European companies have written risk management policies, these are not integrated with financial/operating plans; that US risk managers are more likely to take positions reflecting their market views; and that in all the countries covered derivative users are larger than non‐users. Believes that most risk management programmes “remain in an introductory stage”.

Journal

Managerial FinanceEmerald Publishing

Published: Mar 1, 2000

Keywords: Accounting research; Risk management; Derivatives; Treasury management; Canada; Europe; USA

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