Guidelines For Managers

Top leaders and managers can benefit from these broad guidelines on risk-management issues:

1. Companies in the same sector need not necessarily have the same hedging strategies.
2. Companies can benefit from risk management strategies even if they don’t have any major investments in assets or real estate.
3. No-debt companies having lots of cash can also take advantage of various hedging strategies.
4. Multinational companies (MNCs) need to recognize that foreign exchange risks affect both the company cash flow and investment opportunities.
5. Companies should pay attention to what strategies other companies, especially their competitors are devising.
6. Senior managers should not delegate risk management completely to financial specialists, as it can be misaligned with the company's broader vision.