Assessing the Role of Financial Risk Management Practices in Enhancing Corporate Resilience and Value Creation

Posted: Jul 27, 2019

• Owen Allen
• Owen Flores
• Owen Lee

Abstract

This research investigates the transformative potential of financial risk management practices in fostering corporate resilience and sustainable value creation, challenging conventional approaches that treat risk management as a defensive compliance function. Through a novel methodological framework combining computational finance techniques with organizational resilience theory, we develop and validate the Integrated Resilience-Value Creation Index (IRVCI), a comprehensive metric that quantifies the synergistic relationship between risk management practices and long-term corporate performance. Our study employs a multi-phase mixed-methods approach, analyzing data from 450 publicly traded companies across diverse sectors over a ten-year period, complemented by in-depth case studies of organizations that demonstrated exceptional resilience during recent economic disruptions. The findings reveal that companies implementing integrated, forward-looking risk management frameworks—characterized by dynamic scenario planning, real-time risk monitoring, and cross-functional risk integration—achieved 34