Doctor of Philosophy, Case Western Reserve University, 2024, Management

This dissertation investigates how managers assess ambiguous emerging exposures which lie at the intersection of measurable risk and unmeasurable uncertainty. The problem is important because it has implications for organizational resilience and the efficiency and effectiveness of the risk management function. Study 1, a qualitative interview-based exploration, suggests that risk managers assessing emerging risks in the insurance industry may not evaluate front-line business managers as critically as the “Three Lines” risk governance model recommends they should. The data indicate four potential reasons for the seeming reluctance: (1) the effect of framing emerging risks as opportunities; (2) shared social identity among risk managers and business unit managers; (3) preferences for measuring ambiguous risks qualitatively instead of quantitatively; and (4) the time horizon within which a risk is expected to materialize. Study 2, an experiment with 115 financial professionals, examines two of these reasons: shared social identity and risk framing. It finds that risk managers who identify more strongly with the business units they assess tend to be less objective and that positively framed risks are evaluated less critically. Study 3, an experiment with 193 risk managers, investigates the remaining two reasons—risk quantification and time horizon—and the influence of a risk manager's numerical ability. The study tests how these factors affect the assessment of ambiguous risks indirectly through subjective processing fluency and perceived reliability of risk information. Results show significant indirect effects of information presentation format on willingness to challenge risk information, moderated by time horizon and numeracy. Specifically, controlling for numeracy, risk managers who are considering the distant future along with a quantitative presentation experience greater difficulty processing the risk information, which they then perceive as less reli (open full item for complete abstract)

Committee: Timothy Fogarty (Committee Chair); Anthony Bucaro (Committee Member); Torben Juul Andersen (Committee Member); Kalle Lyytinen (Committee Member); Thomas King (Committee Member) Subjects: Accounting; Behaviorial Sciences; Business Administration; Management

Bachelor of Science in Business, Miami University, 2011, School of Business Administration - Accountancy

Many executives are under intense scrutiny to understand the risks associated with their company strategies because unforeseen risks can drastically affect a company's stock price and financial viability. Since the inception of the Sarbanes-Oxley Act of 2002 (SOX) companies have had to demonstrate through business reporting that the company not only understands the connection of strategy to risks, but must also be able to quantify the impact of risks, as well as demonstrate plans of action to deal with risks as they occur. Reporting risks are specifically important because they are the company's most complete display of its performance and can directly changes how investors determine the stock price of the company – a key factor for all publicly traded companies. One way companies can quantify and report its risk is through Corporate Social Responsibility (CSR) reporting. AEP created the 2010 Corporate Accountability Report to demonstrate to stakeholders that the company is being a positive force in society and in the world. Yet some companies, like BP, have created CSR reports that do not align reality with what the company is reporting. The impact of poor CSR reporting is that some companies produce quality information for stakeholders while others greenwash its reports to look good for stakeholders, making CSR reports difficult for readers to believe and compare against other companies and across time periods. This report assesses the accountability and comparability of AEP's 2010 Corporate Accountability Report to demonstrate that the company still has room for improvement in how it reports. This was accomplished by utilizing AEP's Integrated Enterprise Risk Model (ERM) to understand the company's environmental and safety strategy, the associated risks and stakeholders, and how AEP reports on these issues to determine the strengths and weaknesses of the report. Then AEP's organization model and risk management strategies were used to lay ground for assessment. A (open full item for complete abstract)

Committee: Dan Heitger (Advisor); Brian Ballou (Committee Member); Kevin Armitage (Committee Member) Subjects: Accounting; Environmental Studies