What corporate governance changes could MGAG's management have made to reduce the chances of being surprised in the future by mishaps, like MGRM?
What will be an ideal response?
MGAG might have benefited from having board members who were better versed in derivatives and their applications. It also may have benefited by putting more of the burden for controlling derivative risks on the board's Finance, Investment, and Risk Committee and its Audit Committee. Aside from these suggestions, frequent reports to the board and to the executive committee on the risks of MGRM may have alerted top management sooner to the potential landmines.
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