The Effect of Financial Risk Governance on Volatility Management in Multinational Corporations

Abstract

This article investigates how financial risk governance influences volatility management in multinational corporations operating under heightened macroeconomic and geopolitical uncertainty. The main question is how structures such as board risk committees and enterprise risk management frameworks affect volatility in earnings, cash flows and firm value across complex cross border operations. The study adopts a systematic literature review of peer reviewed research published between 2018 and 2022, synthesizing evidence from banking, insurance and non-financial multinational settings. The results indicate that stronger risk governance is generally associated with more disciplined risk taking, more coherent hedging and capital policies, and more stable solvency and performance indicators, although transition and disclosure effects can temporarily increase measured risk. The article discusses these patterns through thematic analysis of governance mechanisms, volatility measures and international context. The main findings highlight that integrated financial risk governance is a key channel for stabilizing financial outcomes, while empirical evidence specific to multinational groups remains limited.