Effective derivative hedging and initial public offering long-run performance

Purpose: The purpose of this study was to investigate how financial risk management strategies lead to growth of MFI sector in Kenya.Methodology: The study adopted a correlation survey research design. The population of this study was fifty seven (57) MFIs. The sampling frame was the list of MFIs provided in the AMFI website www.amfikenya.com. A sample of thirteen (17) MFIs was selected using the random sampling approach. A questionnaire and an interview schedule were the main data collection tools. Qualitative data was analyzed using content analysis whereas the quantitative data was analysed using Statistical Package for Social Sciences (SPSS) where descriptive and regression analysis were conducted to determine the relationship between enterprise risk management strategies and growth of MFIs.Findings: The findings indicated that MFIs had effective financial risk management strategies such as effective credit risk management practices, liquidity risk management practices, interest risk management practices and price risk management practices. In particular, MFIs took into consideration the conditions, characters, capacity, collateral and capital of borrowers. Strict debt collection practices were widely adopted by MFIs. In addition, the concept of Know Your Customer (KYC) policy, seem to have been adopted by MFIs. The relationship between financial risk management strategies and growth was positive and significant. It also shown that sources of funds for MFIs include external sources and internal sources and the most frequently used source of funds are bank loans. The use of banks loans may present various risk exposures to MFIs, the most significant being interest rate risk. However, the ability of MFIs to source funds from various sources indicates that MFIs can apply the pecking order by first exploiting internal sources of funds since they present a lower financial risks and then move on to external sources. However, despite the financial risk exposure accompanied by leverage from external sources, MFIs may also benefit as they may experience higher growth driven by the leverage. It was also found that MFIs had put in place a number of good practices that had emerged to promote responsible and inclusive lending. These include loan size limits, standardized (simple) loan terms, zero tolerance on delinquency, group-based lending. This finding implies that MFIs have put in place effective credit risk management policies which are part of an overall financial risk management strategy. The existence of effective financial risk management practices may have influenced the growth of MFIsUnique contribution to theory, practice and policy: The study recommends that the MFIs to continue practicing effective financial management practices as this would improve the growth of MFIs.

Abstract: This chapter provides an in-depth exploration of advanced strategies in financial risk management, specifically tailored to navigate the challenges posed by economic volatility, instability, and uncertainty. It covers the critical tools and techniques used by financial institutions and corporations to assess, mitigate, and manage various types of risks, including market, credit, liquidity, and operational risks. The chapter discusses the importance of both quantitative and qualitative risk assessment methods, such as Value at Risk (VaR), stress testing, scenario analysis, and expert judgment. It also delves into the use of financial derivatives for hedging, portfolio diversification strategies, and liquidity management practices. Additionally, the chapter examines the role of emerging technologies like artificial intelligence (AI), blockchain, and big data analytics in transforming risk management processes. Finally, it emphasizes the integration of sustainability into risk management frameworks, highlighting the importance of addressing environmental, social, and governance (ESG) risks in today’s volatile economic landscape. Keywords: Financial Risk Management, Economic Volatility, Market Risk, Credit Risk, Liquidity Risk, Operational Risk, Quantitative Risk Modeling, Value at Risk (VaR), Stress Testing, Scenario Analysis, Derivatives, Portfolio Diversification, Liquidity Planning, Contingency Funding Plans, Credit Default Swaps (CDS), Counterparty Risk, Crisis Management, Regulatory Compliance, Artificial Intelligence (AI), Blockchain, Big Data Analytics, ESG Risks, Sustainable Risk Management.

In the globalized business world, financial information security management (FISM) and corporate risk management (CRM) have become critical elements for ensuring business sustainability and gaining a competitive advantage. The security of financial information not only protects the financial integrity of businesses but also supports long-term success by enhancing reputation management, regulatory compliance, and stakeholder trust. However, the necessity of addressing the relationship between financial information security and corporate risk management within a holistic framework has not been sufficiently emphasized in the literature, especially with the increasing threats in cybersecurity. This gap creates uncertainties regarding how businesses should integrate financial information security into their risk management strategies. The purpose of this study is to analyze the interaction between financial information security management and corporate risk management and to provide a practical and applicable framework for integrating financial information security into business risk management strategies. The study examines how financial information security management is integrated into corporate risk management processes (risk identification, assessment, response, and monitoring) and its impact on organizational performance (cost reduction, efficiency improvement, and competitive advantage). Considering major financial crises and cyberattacks, the global impact of financial information security threats on businesses, national economies, and the global financial system is increasingly being discussed. In this context, the study highlights the critical importance of FISM and CRM for businesses and presents concrete examples of the risks that may arise if these two concepts are not considered together (data breaches, financial losses, reputational damage, legal sanctions). The study systematically reviews existing approaches in the literature (such as ISO 27001 and the NIST Cybersecurity Framework) to contribute to the development of effective financial security and risk management policies for businesses.This study employs qualitative research methods, including a literature review and expert opinions. By analyzing current studies and industry reports, the relationship between financial information security and corporate risk management is examined in depth.In conclusion, integrating financial information security management with effective corporate risk management policies plays a crucial role in enhancing business sustainability, gaining a competitive advantage, and reducing costs. Businesses must adopt a holistic management approach that incorporates cybersecurity measures, financial risks, and regulatory requirements. This comprehensive approach is essential for ensuring long-term success and maintaining a competitive edge in today's dynamic business environment.

The study aimed at identifying the role and importance of risk management in enhancing and managing the strategic and dynamic marketing decisions that relate to strategic problems of multi-dimensions and of great depth and complexity. This kind of decision requires in-depth research of the risks and the capacity for future analysis and discussions, which deal with all hypotheses and possibilities. Thus, the decision makers are critical resource for the company. Thus, it is necessary to stress on the importance of studying risk management and its role in enhancing the strategic marketing decision-making process, which is considered a way for companies to drive the future, which is the center of this study. In order to achieve the objectives of this study, a questionnaire was designed and distributed in person on a sample of managers of industrial companies in the Jordanian private sector.45 out of 65 distributed questionnaires were found to be valid. The data were statistically analyzed and the results showed that the strategic marketing decision makers in the industrial company realize the importance of risk management and employ it in the process of strategic marketing decision-making. However, the actual management or perfect investment of risk management in the industrial sector is still limited due to the existence of obstacles and limitations concerning managers and leaders and the available technical, information and material capabilities.

Risk Management at Crunch Time: Are Chief Risk Officers Compliance Champions or Business Partners?

In this qualitative study, it became clear that an evolution towards a higher level of risk-based auditing is absolutely necessary, if internal auditors are to play an important role in risk management. The implementation of effective risk management is the key to the success of a company. This article aims to provide a literature review related to the role of the internal auditor function in carrying out effective and efficient risk management. The explanation of this article can add to the literature related to the role of internal auditors in implementing corporate risk management and can assist company management in selecting internal auditors so that company goals can be achieved. Thus, the company can have an optimal level of risk according to the company's risk appetite. Internal auditors are also required to uphold the professional standards of internal audit in carrying out their duties so as to provide the best guarantee for the company.

Journal of Healthcare Risk ManagementVolume 21, Issue 4 p. 13-18 Article The risk manager's role in creating an organizational patient safety strategy Mary E. Gutman RN, MS, CPHRM, Mary E. Gutman RN, MS, CPHRM Director Risk Management/Insurance Premier Health Systems Dayton, OHSearch for more papers by this author Mary E. Gutman RN, MS, CPHRM, Mary E. Gutman RN, MS, CPHRM Director Risk Management/Insurance Premier Health Systems Dayton, OHSearch for more papers by this author First published: 23 July 2009 https://doi.org/10.1002/jhrm.5600210404Citations: 1AboutPDF ToolsRequest permissionExport citationAdd to favoritesTrack citation ShareShare Give accessShare full text accessShare full-text accessPlease review our Terms and Conditions of Use and check box below to share full-text version of article.I have read and accept the Wiley Online Library Terms and Conditions of UseShareable LinkUse the link below to share a full-text version of this article with your friends and colleagues. Learn more.Copy URL Share a linkShare onFacebookTwitterLinked InRedditWechat Citing Literature Volume21, Issue4Autumn (Fall) 2001Pages 13-18 RelatedInformation

The article presents theoretical and practical problems of financial risk management in Ukraine. It is substantiated that small business plays an important role in the socio-economic progress of any country – a potential locomotive of the national economy. Its importance is revealed in a number of economic, investment and social functions. In a social sense, small business contributes to employment; satisfying the consumer demand of the population; development of the middle class; acquisition and development of entrepreneurial skills, realization of human abilities. It has been proven that the application of a complex approach allows predicting individual effects of the enterprise's macroeconomic activity to avoid risks with the use of longitudinal (spatial, panel) data models. The obtained results have practical value for manufacturers and exporters in the management of financial risks. The study also provides recommendations to managers and stakeholders regarding financial risk management mechanisms that can contribute to increasing the efficiency of enterprises and states. The level of external financial risk has been established, which indicates an effective financial risk management policy, which leads to an improvement in the company's financial condition.

The present paper aims to identify the role of internal audit function in risk management from the perspective of risk managers in banks operating in Palestine, with a review of the concept, importance, objectives, and principles of internal audit and its role in risk management for banks. The target population is the risk managers in the banks operating in Palestine. The major findings in the presented paper. First, the main factor in risk management is the risk manager's efficiency, and the internal auditing focuses on evaluating the risk management department and ensuring the efficiency of risk management practices in dealing with these risks. Second, the internal audit departments in the banks operating in Palestine participate in providing advice, suggestions and recommendations for the risk management department. Based on the results, the board of directors and senior management in these banks should continue to pay attention to the risk management department, and the need for coordination between these departments to achieve the best results at the banking and economic levels.

This paper analyzes whether the Inter-American Development Bank (IDB, or Bank) has fully and effectively implemented the IDB-9 requirements related to risk and financial management. IDB-9 included four requirements in this area: (i) adopt a rule-based Income Management Model (IMM); (ii) implement the recently introduced risk-based Capital Adequacy Policy; (iii) execute a set of agreed actions to enhance the short-term sustainability of the Fund for Special Operations (FSO); and (iv) continue strengthening the Banks Risk Management Framework. The Bank has fully implemented the IDB-9 financial and risk management actions. The highly detailed and prescriptive nature of the requirements aided implementation. In terms of effectiveness, the IMM imposes financial discipline and enhances financial selfsustainability by linking Bank expenses directly to income through loan charges. The CAP supports prudent risk management and the Banks AAA rating. The actions taken for the FSO will not be sufficient to ensure the Funds sustainability until 2020, as mandated in IDB-9, and Management is preparing to propose additional measures for the Board¿s approval. A few issues with the IMM and CAP merit further review going forward. First, the IMM is very strict, with a high administrative expense coverage rule and its inclusion of nonoperational expenses. Second, it is not clear that the reserve ratios for sovereignguaranteed (SG) and non-sovereign-guaranteed (NSG) exposure adequately reflect their relative levels of risk or lead to the most effective leveraging of scarce Bank capital. Third, the Bank¿s unused borrowing capacity rule¿though perhaps reassuring to potential investors¿is outdated and is not relevant to the maintenance of the Bank¿s AAA rating, while a criterion that rating agencies do consider relevant¿country portfolio concentration¿is not factored into the Bank¿s rules. Finally, the IDB-9 architecture is inward-looking and does not promote a focus on the Bank¿s financial competitiveness. In light of these findings, OVE suggests that the Bank (i) consider introducing greater flexibility in the IMM by setting an administrative coverage band and perhaps excluding certain nonoperational expenses; (ii) review the capital accumulation rule and the reserve ratios for SG and NSG exposures; (iii) update the Bank¿s financial rules by phasing out the borrowing authority limit; and (iv) use the financial and risk management architecture as input to strategic decision-making on the projected size of the Bank, the blend of SG and NSG lending, expected countercyclical support, the role of the FSO, and the Bank¿s approach to future capitalization.

In recent years, the role of risk management has emerged as a key success factor in ensuring the growth on the one hand and the survival on the other hand of any organization. Moreover, dependence on IT has become systematic within any organization. This dependence therefore, implies the importance of implementation of an IT risk management system in order to well manage IT risks. There are several standards that deal with enterprise risk management in general or information security in particular. However, few standards deal with IT risk management. Noting, for example, COBIT 5 (Control Objectives for Information and related Technology) which deals with IT risk management but is complicated to deploy. The purpose of this article is to describe a simplified IT risk management maturity audit system in an organization based on “COBIT 5 for risk”. This system aims to evaluate the maturity of IT risk management before proceeding to the implementation or update of an IT risk management system within an organisation.

The article examines the role of accounting digitalization and the development of digital audit in the system of using financial instruments for price risk hedging in international markets. It is determined that in the conditions of globalization of economic processes, instability of global commodity and financial markets, and increasing price volatility, the need for effective financial risk management tools is significantly increasing. Particular attention is paid to the impact of the digital transformation of the economy on the development of accounting and auditing, as well as to the use of modern information technologies, including cloud services, Big Data technologies, artificial intelligence, and blockchain for processing financial information and ensuring the reliability of financial reporting. The study analyzes the essence and key characteristics of digital accounting and digital auditing and identifies their main functions and differences in the system of financial information management. The paper also characterizes the main financial instruments used for price risk hedging in international markets, including forward and futures contracts, options, swaps, and other derivative financial instruments. In addition, modern software solutions used for accounting, risk management, and financial control are considered, particularly enterprise resource planning (ERP) systems and analytical platforms used by international companies and financial institutions. It is substantiated that the use of digital technologies in accounting and auditing contributes to improving the transparency and reliability of financial information, increasing the efficiency of financial control, and ensuring the operational processing and analysis of large volumes of financial data. Digital solutions also create favorable conditions for monitoring financial transactions, assessing market risks, and supporting informed managerial decision-making. The development of digital accounting and digital audit tools forms an important information basis for the effective use of financial instruments for price risk hedging and enhances the stability of enterprises operating in the global financial environment.

The agribusiness sector is a cornerstone of national and global economies, encompassing the production, processing, marketing, and distribution of agricultural goods. Effective financial management within agribusiness is critical, as it directly influences resource allocation, investment decisions, risk mitigation, and overall enterprise sustainability and profitability. This study conducts a comprehensive literature-based analysis to examine how financial management practices bridge finance and farming, focusing on cost management, working capital management, financial risk management, investment appraisal, digital finance adoption, financial literacy, and corporate social responsibility (CSR). Evidence from diverse geographic and operational contexts demonstrates that structured financial practices significantly enhance profitability, operational efficiency, and resilience in the face of seasonal cash-flow fluctuations, price volatility, and environmental risks. Cost management aligns operational efficiency with strategic financial planning, while working capital management ensures liquidity and continuity during peak production periods. Financial risk management and CSR integration mitigate exposure to market and environmental uncertainties, promoting sustainable practices and stakeholder trust. The adoption of digital finance tools and platforms further strengthens the interface between financial planning and farm operations, although constraints such as low digital literacy and infrastructure limitations persist. Moreover, financial literacy among small-scale farmers emerges as a key enabler, facilitating the effective utilization of financial tools and resources. Investment decision-making frameworks incorporating scenario analysis and real-options valuation support informed capital allocation and long-term growth. Overall, the study underscores that bridging finance and farming is operationally vital, multi-dimensional, and strategically essential for achieving sustainable agribusiness growth. Insights from this analysis inform policymakers, practitioners, and researchers seeking to optimize financial management strategies in agribusiness contexts.

Climate change has resulted in increased frequency, intensity, magnitude, and uncertainty of natural disasters. This has been clearly brought out in various assessment reports of Intergovernmental Panel on Climate Change (IPCC), in particular AR IV and AR V. As vulnerabilities cannot be predicted completely, good governance can play a critical role in management of the disaster risks, improve resilience, and meet the challenges of sustainable development. Effective disaster risk management to reduce vulnerability would require mainstreaming CCA/DRR into policy, planning, and implementation of development schemes as a multilevel approach which combines activities at various levels and uses top-down as well as bottom-up dynamics. For proactive planning and to identify flexible options for unknown and unpredictable future, disaster risk governance is to be strengthened both vertically and horizontally. Therefore, good governance is the need of the hour, and it would play a critical role in effective management of disaster risks.

This article examines recent debates about guiding principles and implementation of risk management in the federal government. Considering influences from both political and scientific arenas, the article will highlight how changing perspectives about science, regulatory objectives, and decision models are fostering significant innovations in the conduct of risk management by federal agencies. The first part of the article summarizes several explicit signals of rethinking the federal approach to risk management at the administrative and congressional levels. The second part considers particular intellectual shifts in our understanding of risk management that are fueling contemporary debates on the science, objectives, and process. Specific agency examples are used to illustrate recent suggestions for or experience with implementing innovations for federal risk management. The article concludes with some thoughts about the future of the federal role in risk management and risk policy more generally.