CEO decided to trade more derivatives which unfortunately resulted in more losses and more over time. o The strategy and risk tolerance of the company should be decided at the very top level of the organization how to manage risk and the risk appetite the company can take / tolerate are decisions that are ultimately the responsibility of the board members, since those decisions can have a significant impact on the shareholder value of the company. o The speculative option trading started without it being properly encapsulated in risk management policies and senior management oversight.