Developing a Risk Management Framework Aligned with the Asset Manager Code

As an asset manager, your firm is committed to implementing the CFA Institute's Asset Manager Code, particularly focusing on the principles surrounding risk management. Imagine you are the Chief Risk Officer at a mid-sized asset management firm that has recently faced several internal and external challenges regarding its risk management practices.

In light of these challenges, you have been tasked with developing a comprehensive risk management framework that aligns with the Asset Manager Code. This framework should not only address regulatory compliance but should also enhance the firm’s risk culture, improve decision-making processes, and ensure effective communication of risks both internally and externally.

Compose a well-reasoned essay that outlines the essential components of your proposed risk management framework. Specifically, you should discuss: 1) the importance of establishing a clear risk governance structure, 2) methods for identifying and assessing risks, including quantitative and qualitative measures, and 3) the strategies for communicating risks to stakeholders. In your response, include how adherence to the Asset Manager Code can benefit the firm in the long term.