Management Risk(redirected from Management Risks)
The risk of a loss due to incompetent management. That is, if a money manager consistently makes bad investment decisions for a fund or portfolio, there is a substantial risk that investors will lose money. Alternatively, the managers of an individual publicly-traded company may choose to suspend its most profitable operation and invest in unprofitable ones. This may result in a loss to shareholders. Various incentives and benchmarks exist in companies to reduce management risk; all have their proponents and critics. See also: Manager Universe (Benchmark).