- risk management •
- financial and operational hedging •
- foreign exchange risk •
- Sarbanes-Oxley act •
- Corporate Governance Reform •
- Board monitoring •
- Risk-Taking Incentives
We use the reform process of the Sarbanes-Oxley Act of 2002 as a quasi-natural experiment to identify the impact of corporate governance reform on foreign exchange risk hedging, and find that the substantial improvements in governance standards reduced foreign exchange exposure and increased derivatives hedging.