ABSTRACT
This chapter reports a pronounced divergence between measures of corporate risk after the late 1970s, with dramatic falls in the rates of point-source risks and rising incidence of strategic risks. It quantifies risk at the global level using data on corporate crises and man-made disasters provided by Swiss Re in its annual paper entitled Natural Catastrophes and Man-made Disasters. The endogenous nature of firm risk was confirmed by Palmer and Wiseman who found that at least 20 per cent of organizational risk propensity is explained by managers' risk attitudes, and relatively little by external factors such as industry structure. A challenge for development of an integrated approach to risk management is that the many different measures of firm risk are generally treated as mutually exclusive. Tax incentives to promote retirement savings were the other important policy change and spurred growth of the mutual fund industry. Privatization regenerated whole industries particularly energy, telecommunications and utilities that have now become glamour sectors.
