Financial Policies and Corporate Risk Management
How did the crisis get out? How could we get out of the crisis? These
are the main questions we have heard in the last 18 months. Any trial
answer always contains a couple of words: "risk" and "decisions" (i.e., policies). But no clear prescriptions are given in order to fix how corporations might "decide about the risk".
This course depicts how to carry on wise decisions in corporate financial policies, moving from the assumption that risking is an essential component of the nature of the firm. No risk means no entrepreneurship, thus meaning no economic progression. Too much risk means exactly the same. How much risk means value (creation)? Thus, corporate risk management (CRM) is not the "how-to-reduce-risk" technical job, but it is the art of deciding ti harmonize risk to the long-term competitiveness of the firm: a fundamental skill for managerial job.
Like all the arts, CRM requires knowledge about: (i) the tools to be used; (ii) the techniques for their use; (iii) the aims (strategy) and tastes (risk tolerance) of the users (corporations); (iv) the tailoring of the tools to the users; (v) the translation of the skills (revising the risk-to-return ratio) into value (protection, at least; creation, at most) for the entire set of corporate stakeholders.
The course tries to depict these five points both by showing them at a theoretical level and through practical examples and case studies.