Risk Management and Finance

The purpose with an internal risk management system, in a broad sense, is to ensure that the risks a firm exposes itself to are the ones to which it thinks it is exposed to and wants to be exposed to. A system with desirable features is one that enables management to make economic decisions and reasonably well understand the probabilities of different outcomes. Ultimately this enhances the value of shareholder equity.

Once a risk management system is in place it is ideally integrated in the organization’s normal control system. As such, both responsibilities and risk measures are understood by people throughout the organization. A risk management group's primary role is to ensure that the system is responsive to changes in the business environment and organization.

During this course participants learn about the theory of risk and uncertainty, the association between return and risk/uncertainty, the risk management process and the identification and measurement of various sources of risk applicable to the finance of innovation.