Information, insight, inspiration Whether you’re taking the first steps toward making your risk management more systematic, or looking to get ahead of the curve, this report gives you vital insight into benchmarks and best practices that you can start to apply today. Financial risk is a hotter topic than ever. Currency rates have never been more volatile, making cash flow unpredictable. Interest rates are literally through the floor, prompting many corporates to consider refinancing, while others are questioning how they can maintain yield on their liquidity investments. Organisations can pull many levers to mitigate economic risk to their business — including changing prices, withdrawing from turbulent markets, making acquisitions and diversifying supply chains. But within the realm of the CFO, hedging is perhaps the primary mechanism for limiting the unpredictability of the future and thereby containing risk. We set out to investigate corporates’ use of hedging, surveying the practices of more than 170 multinational corporates headquartered in Finland, Sweden, Denmark and Norway. These giants represent almost every industry sector and in our view set a world-class benchmark for financial risk management. The findings in this report offer you: Best practices: If your business doesn’t yet take a systematic approach to risk management, you can look to the example of financial risk management practices among leading corporates. Benchmarks: For a firm that already manages financial risks systematically, the study provides vast amounts of benchmarking material. Alternatives: Not every technique or approach will suit your circumstances. CFOs and group treasurers must be able to clearly articulate to the board why their approach is most appropriate. Our findings offer background to inform these discussions. Inspiration: The scope of financial risk management is constantly expanding, and new approaches are being considered to respond to change. The study offers inspiration for those aspiring to get ahead of the curve. Contributors This report would not have been possible without the contribution of experts across Nordea. We’d like to thank: Antti Aittola, Dan Anttila, Kristina Holmberg, Uki Lammi, Maiken Lausen and Jari Liede. Contents Page 3 — Risk policies: fail to plan, plan to fail Page 5 — FX: run your own race Page 8 — Interest rates: fit for the future Page 10 — Liquidity: staying positive Page 1 1 — About our survey 2 Hedging Survey 2016
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