Who Manages Risk? An Empirical Examination of Risk Management Practices in the Gold Mining Industry

Tufano, Peter (1996) Who Manages Risk? An Empirical Examination of Risk Management Practices in the Gold Mining Industry. The Journal of Finance, 51 (4). pp. 1097-1137.

Abstract

This article examines a new database that details corporate risk management activity in the North American gold mining industry. I find little empirical support for the predictive power of theories that view risk management as a means to maximize shareholder value. However, firms whose managers hold more options manage less gold price risk, and firms whose managers hold more stock manage more gold price risk, suggesting that managerial risk aversion may affect corporate risk management policy. Further, risk management is negatively associated with the tenure of firms' CFOs, perhaps reflecting managerial interests, skills, or preferences.

Item Type: Article
Additional Information: (Co-winner of the 1996 Smith Breeden Prize for Best Paper in the Journal of Finance)
Keywords: risk management; stockholders; consumer lending
Date Deposited: 27 Oct 2011 16:12
Last Modified: 14 Aug 2015 13:04
URI: http://eureka.sbs.ox.ac.uk/id/eprint/951

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