Management Risk. Management is a critical factor that sits between the business and financial risk analysis. In a client relationship, there are many opportunities to be on calls with management, and get a sense of who they are. There are also equity research earnings calls, which might have a different focus than the credit opportunity at hand, but still give insight into management's abilities to meet goals, and be transparent about what is going on in the company. If there are researching of current management should turn up the necessary facts. Just keep in mind, some CEOs are talented at dispelling concern, and keeping people on their side. If the facts are showing missed goals, constant restructurings, acquisitions, aggressive capital structure management. No matter how upbeat and convincing management is on the calls, there could be problems. The key areas to consider are corporate governance. How aggressive is the corporate culture? Frequency of litigation, management turnover, changes in accounting policies, the operations, are there abrupt shifts in operating strategy, frequent restructurings, asset sales, layoffs, is the company overly acquisitive, and the financial governance, the complexity of leverage in the capital structure. High use of derivatives, particularly for non-operating purposes, are they aggressive in creating shareholder wealth. All of these issues can have a serious impact on the credit quality of a company.