Financial Risk Management

July 20 – 31, 2020

4 ECTS, 20 contact hours in total

The course offers students a set of practical instruments to identify, analyze and mitigate financial risks.

Course Description

This course focuses on enterprise risk management (ERM) in turbulent economics. It covers most of recent changes in compliance, risk management and corporate governance. With a set of lectures and workshops on the system of ERM, the course helps to evaluate its efficacy of intra-corporate corporate governance, identify, analyze, and evaluate different types of corporate risks, as well as prepare and interpret financial reports. The course is taught by Vasilisa Makarova, Associate Professor, Department of Finance, St. Petersburg School of Economics and Management, HSE; Jeff Downing, PhD, Associate Professor, Department of Finance, St. Petersburg School of Economics and Management, Academic Supervisor of the programme ‘International Business and Management Studies’, HSE;  Victor Krakovich, Senior Lecturer, Department of Finance, St. Petersburg School of Economics and Management, HSE; and Aleksander Shchelkanov, PhD, Associate Professor.

Why Choose This Course?

Benchmarking of corporate risk management is at the heart of this course. Students will discuss, for example, what stakeholders expect from risk management, how risk management reduces the consequences of short-termism, or how to build a corporate risk oriented culture. In addition to modern theoretical approaches, the course offers a significant number of practical tasks. Using a real-world data set, students will apply financial modeling in Excel and statistical packages (SPSS and STATA).

Content

• ERM framework

• Risk management and company survival

• Patterns of risk management

• Financial reporting and compliance

• Transparency and clearness of management results

• Compliance

• Models of internal audit/control/risk management effectiveness evaluation

• Maturity of internal audit/control/risk management

• Preparing and interpreting corporate financial information

Skills and Competences

Upon completing this course, students should have the following skills and competences:

• А thorough understanding of corporate governance and ERM – including the role of internal audits, internal controls, and risk-management departments
• The ability to design and evaluate the efficacy of corporate governance and ERM
• The ability to identify, analyze, and evaluate corporate risks
• The ability to prepare and interpret corporate financial information

Prerequisites

Applicants should be familiar with financial math, basic knowledge of risk management, time value of money, probability models.

Teaching Methods

The course combines theoretical and practical components. 

Final Assessment

Individual project work which includes case study, problem solving, financial modeling, developing a presentation. 

Final Grade Background

Students will be given four tasks (case study, problem solving, financial modeling, presentation). The final grade will be computed according to performance of each of the tasks. In order to complete the course students have to attend no less than 70% of classes.

Recommended Reading List

Massa, Massimo & Wu, Fei & Zhang, Bohui & Zhang, Hong. (2015). Saving Long-Term Investment from Short-Termism: The Surprising Role of Short Selling.

Choi, Jongmoo & Mao, Connie & Upadhyay, Arun. (2013). Corporate Risk Management under Information Asymmetry.

Brochet, Francois & Loumioti, Maria & Serafeim, George. (2012). Short-Termism, Investor Clientele, and Firm Risk.