Management Risk

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Management Risk

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).
References in periodicals archive ?
Business model and management risks risks arising from how undertakings structure, drive and manage their business and from relationships with other entities in the value-chain
Product management risks risks arising after the sale of the insurance product relating to how products are managed and how insurance undertakings or intermediaries interact with and service customers until all obligations under the contract have ceased
Since these projects were announced, environmental groups big and small have been working to raise the profile of the financial, environmental, social and management risks of the projects.
We have been working with other groups to develop a summary of the financial, environmental, social and management risks of the project.
Nispana Innovative Platforms has identified that it is conducive to address environmental and waste management risks and is hosting the Waste Management Oman Summit in collaboration with Leading Environment Change Bee' ah on March 11 and 12 at Grand Hyatt Muscat.
Summary: Algerian expert in international white-collar crime, Messaoud Abda said Tuesday in Algiers that the state should take provisional shares in private banks capital to be established in the future to strengthen the management risks and to better fight against financial crimes.
The CITIC will likely tap the management experience accumulated by domestic counterparts, especially in margin trading, with such learning to enable CITIC to minimize spending on controlling management risks after China allows margin trading.
Moeller also addresses the importance of ERM for the board of directors and audit committee, the role of internal audit, understanding and integrating project management risks, managing information technology risks, and establishing a culture that reflects management's risk appetite.
If, for instance, you believe it is rare for a manager who initiates risks to get to the top and you possess that ambition, you are less likely to be open to taking optional management risks yourself.
Taking management risks makes good sense only in the absence of acceptable alternatives.

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