Alternative Method of Mitigating Risk on Medium and Large Corporations | Chapter 14 | Current Perspective to Economics and Management Vol. 4
High operating costs and complexity of risks are impacting negatively on corporations’ profitability despite practicing corporate governance. Corporate governance requires that the management develops frameworks, structures, and guidance to manage enterprise risk. The traditional methods of mitigating risk have relied heavily on insurance as the only mean of protecting enterprise against risks. The traditional methods are now becoming too expensive for corporations and are not able to cover all risk exposures. This problem forms the basis of the research problem in this study. The purpose and objective of this study are to establish alternative methods of mitigating risks in corporations and develop models for computing benefits accruing to the corporations as a result of using the new alternative method. As such, this study identifies financial assets, sinking fund, ploughing back of premiums as possible investments where forgone insurance premiums can be invested and develop a mod...