Rooted in research
The Risk Institute meets at the intersection of academia and industry and is committed to generating new insights and influencing the adoption of leading risk management practices. As part of this commitment, The Risk Institute sponsors funding for research ─ area-specific and interdisciplinary ─ seeking to discover and advance risk management concepts that organizations can use to leverage risk management to create value.
The Risk Institute Annual Survey on Integrated Risk Management
This annual survey by The Risk Institute was created in 2014 to better understand how senior executives from both financial and non-financial industries view risk management’s role in their organization; how, if at all, they integrate risk management into business decisions; and how they structure their risk management function to support its role in the firm.
The Risk Institute facilitates the translation of academic research into practical application, bringing compelling risk related research into the business community. Written from the perspective of a practitioner, this one page overview goes beyond an executive summary and focuses on the substantive insight of the research in a concise and efficient manner. Easily digestible, these summaries highlight current academic findings and make them applicable to the current challenges facing risk management professionals.
Additional categories and subjects will be added regularly. Check back often!
Research Funding Proposals
The Risk Institute invites area-specific and inter-disciplinary proposals to fund research related to risk management. Cash grants of up to $30,000 cash may be awarded to support the research.
Please check back with us in Fall 2016 for our next call for papers.
Grants Issued - Research in Progress
- Global Active Ownership
Elroy Dimson, University of Cambridge Judge Business School
Oğuzhan Karakaş, Boston College Carroll School of Management
Xi Li, Temple University Fox School of Business
This paper will be built upon the researcher's previous study published in the December 2015 Review of Financial Studies (lead article and Editor's Choice article) which found that major institutional investors ("universal owners") are increasingly exercising their rights to influence the way businesses are managed. In this proposal, research will broaden the perspective to a global scale and address questions such as how national and institutional characteristics such as legal régime, culture, governance systems, and economic development, as well as collaborations at the national, institutional, international levels influence the active ownership activities.
- Measuring Management Risk and How it is Managed
Yihui Pan, University of Utah David Eccles School of Business
Tracy Yue Wang, University of Minnesota Carlson School of Management
Michael S. Weisbach, The Ohio State University Fisher College of Business
This paper will identify the effect of management uncertainty on the costs of borrowing, using the idea that a manager's impact on firm value becomes known more precisely over his tenure. Preliminary results suggest that uncertainly about the CEO contributes substantially to a firm's cost of borrowing during the early years of a CEO's tenure, and that the sensitivity of firms to the CEO's tenure more than doubles when the CEO is not considered an "heir apparent", when he comes from outside of the company, and when he is younger.
- Culture and Risk: An Interdisciplinary Review
Oded Shenkar, The Ohio State University Fisher College of Business
Simcha Ronen, Tel-Aviv University
The researchers will conduct an interdisciplinary review of risk, culture, and their interrelationships, consistent with the call heard across multiple disciplines for greater interdisciplinary research as a way to advance knowledge. The researchers hope to create interdiscipliary bridges by recording differences across areas such as conceptual and operational definitions of risk and culture; risk dimensions, manifestations and measures; cultural measures and dimensions, dependent variables used (e.g. home bias in finance, liability of foreignness in international business); and theories underlining the relationship between culture and risk; along with fifteen other areas and disciplines.
- Relative Performance Evaluation and CEO Risk-Taking
Karen Hopper Wruck, The Ohio State University Fisher College of Business
YiLin Wu, National Taiwan University
The paper will examine the implications of Relative Performance Evaluation (RPE) versus Absolute Performance Evaluation (APE) for risk taking by CEOs. Specifically, whether RPE encourages CEO risk-taking (and how it's reflected in components of firm-level risk and investment policies); does RPE affect risk-taking incentive symmetrically or are incentives different for winners vs. losers or firms operating in more vs less competitive environments; and how do RPE firms set performance targets relative to benchmark performance and the effect of target setting on CEO risk-taking.
- Risk Shifting or Management with Conflicts between Creditors and Owners: Evidence from the Insurance Industry
Shan Ge, PhD Candidate, The Ohio State University Fisher College of Business
The paper will focus on how companies change the riskiness of their investments when the conflict between the companies' financing providers is exacerbated by financial distress. Also, how different organizational forms (e.g. stock vs. mutual) with different corporate governance structures differ in their response to intensified conflicts among claim holders. Using the insurance industry as an example, the project will explore whether major underwriting losses lead to changes in the riskiness in investments in financial assets as well as risk management strategies.
- Firms’ Health Insurance Risk and the Affordable Care Act
Eric Seiber, The Ohio State University College of Public Health
Brian Hilligoss, The Ohio State University College of Public Health
Wendy Xu, The Ohio State University College of Public Health
This paper seeks to examine how companies respond to risks related to health insurance arising from the Affordable Care Act (ACA). The researchers are interested in understanding the ways organizations are managing their exposure related to these risks and the implications of these decisions on corporate and HR strategies.
- How much for a haircut? Illiquidity risk, the secondary market, and the valuation of private equity
Berk A. Sensoy, The Ohio State University Fisher College of Business
Nicholas P. B. Bollen, Vanderbilt University Owen Graduate School of Management
This paper focuses on examining whether empirically observed returns and diversification benefits to investors in private equity funds suffice to offset the risks they face, and correspondingly how they affect the investors’ overall portfolio allocations to private equity. Completed translation and link to paper.
- Managing the Tension between Confidentiality Protection and Innovation: The Impact of Supply Network Structure and Relationship Strength
Brett Massimino, Cornell University School of Hotel Administration
John Gray, The Ohio State University Fisher College of Business
Yingchao Lan, PhD Candidate, The Ohio State University Fisher College of Business
This research involves examining tension which exists between the performance outcomes of confidentiality and innovation capabilities and their associations with the characteristics of the network involved in new product development.