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The practice of risk oversight since the global financial crisis: closing the stable door?

Zhivitskaya, Maria (2015) The practice of risk oversight since the global financial crisis: closing the stable door? PhD thesis, The London School of Economics and Political Science (LSE).

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Abstract

This thesis examines the emergence of risk oversight since the global financial crisis, considering how different actors construct the idea of oversight and examining multi-level accountabilities that make it an organisational reality. The practice of oversight is assessed by 61 interviews and 17 weeks of field immersion in major financial institutions in London. The research questions are: ‘How does the practice of risk oversight differ from management?’, ‘How has the concept of oversight evolved?’, ‘Where exactly within financial organisations does risk oversight happen?’, and ‘How do Risk Committee members operationalise their risk oversight role?’ Tentative conclusions are also drawn on the extent to which enhancements in risk oversight since the crisis have strengthened financial institutions’ ability to manage risk. The first empirical chapter considers the evolution of regulatory attitudes to risk oversight before and after the financial crisis, and discusses the changing role of non-executives. The second empirical chapter on board risk committees discusses their accountability and relationships, both within and outside the firm. It shows board risk committee members to be an important part of the fabric of oversight who are still ‘feeling their way’ towards a stable definition of their roles and functions. The third empirical chapter discusses how oversight is organised within financial institutions. This is now commonly done through the ‘Three Lines of Defence’ framework. This is an idealised framework for risk governance that delineates how three layers of risk involvement (production, risk management and internal audit) are differentiated and also defined by their relations of oversight to each other. The last chapter discusses information intermediaries: the people within firms who create information flows within the oversight structures. Information is at the core of any oversight practice and this chapter shows that providing it to risk overseers, accurately and comprehensively, is a continuous struggle for the various parties involved.

Item Type: Thesis (PhD)
Additional Information: © 2015 Maria Zhivitskaya
Library of Congress subject classification: H Social Sciences > HG Finance
Sets: Departments > Accounting
Supervisor: Power, Michael and Hall, Matthew
URI: http://etheses.lse.ac.uk/id/eprint/3259

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