Operational Risk and Resilience

sistent fashion to shareholders. For example, if speculation in

the treasury department involves a high degree of risk taking,

it may be at odds with the over-purchase of insurance, which

signals risk aversion. Shareholders, who recognize that a con-

sistent approach across an organization signals good manage-

ment, may believe that such an approach does not maximize

value.

Risk financing and shareholder value

Continuing this theme, it has already been proved that new,

innovative risk financing techniques for operational risks can

immediately increase shareholder value. An example is financ-

ing environmental remediation costs. Many firms acro s s

sectors are ...