Enhancing Risk Management Practices at XYZ Asset Management

As a newly appointed Chief Risk Officer (CRO) of XYZ Asset Management, you are tasked with enhancing the firm's risk management practices in line with the CFA Institute’s Asset Manager Code. This includes laying down the framework for identifying, measuring, and managing risk while ensuring that all practices are ethical and uphold the integrity of your clients' investments.

XYZ Asset Management has significant allocations in equity, fixed income, alternative investments, and derivatives. Recently, the firm faced criticism from stakeholders regarding insufficient risk assessment strategies and a perceived lack of transparency in reporting risk exposures. In light of these challenges, structure your response by addressing the following:

1. Outline a comprehensive risk management framework that you would implement.
2. Discuss the ethical implications of transparency in risk reporting to clients.
3. Identify the key considerations for using derivatives in risk management, and how these align with the firm’s fiduciary responsibilities.