A primary responsibility of the corporate risk committee is defining the institutional rules that govern treasury actions, codified within the formal Corporate Treasury Policy.
The Hedging Mandate Spectrum
The board configures treasury guidelines along a clear operational spectrum based on the enterprise risk tolerance:
[Strict Passive Hedging Rules] ---> 100% of transaction exposures locked instantly; zero manager choice
  |- [Layered Strategic Portfolios] -> Hedges scaled dynamically based on contract visibility horizons
       |- [Discretionary Profit Centers] -> Managers adjust positions to exploit market trends

By establishing explicit approval thresholds, counterparty credit caps, and allowed derivative lists, the treasury policy ensures that risk management activities protect core operations rather than creating unapproved speculative exposures.
 
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