Lehman Brothers' September 2008 insolvency was the largest in U.S. history, with worldwide repercussions that persist today. The case considers an uncommon strategy: it assumes a general management perspective and offers a unique 360 degree description of the company's internal risk management system (RMS), i.e., the proper structures and procedures managers had designed and were using to handle risk. This description serves as a vehicle for providing essential understanding of the principles of RMSs to pupils of control.
The case broadly envelop the many specific management confrontations associated with delegating risk-taking in a decentralized firm: the organization of danger governance, risk control and risk taking responsibilities; the performance measurement framework employed to budget, measure and monitor risk taking over time; as well as the provision of incentives to empowered, risk taking frontline staff. It also aids students become acquainted with a financial firm's day to day practices and confronts pupils using a particular, non-trivial decision scenario of applied risk management.
Risk Management at Lehman Brothers, 2007-2008 case study solution
PUBLICATION DATE: June 27, 2013 PRODUCT #: IES370-HCB-ENG
This is just an excerpt. This case is about FINANCE & ACCOUNTING
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