Information, insight, inspiration This report would not have been possible without the contribution of experts across Nordea. We’d like to thank: Antti Aittola, Tuomo Jääskeläinen, Salla Lumiaho, Jari Liede and Jakob Malm. While past surveys have focused on large corporates’ best practices when it comes to financial risk management, we’re now turning the lens onto the medium-sized corporate segment. Whether you’re taking the first steps towards making your risk management more systematic, or looking to get ahead of the curve, you can now benchmark your strategy against that of your peers. Nordea Markets has in the past tried to set a benchmark for best practises in hedging and other treasury operations by periodically asking the largest Nordic multinationals what, why and how they do it. The findings have been consistent over the years: Almost every large corporate hedges the FX risk in their operative cash flows, simply because that risk is big enough to affect their operative performance. The “how” has always been more nuanced, depending on the industry and specific company. When presenting the findings from these studies to medium-sized companies as “the best way”, we often get push-back: “That might be the way the largest companies’ treasuries do it, but how is that a relevant comparison for a company of our size?” Hearing this critique, we are now focusing the lens on the mediumsized segment, which a broader swath of our customers can identify with. While your resources may be more limited than those of the multinational giants, there are steps you can take to make your risk management more systematic and get ahead of the curve. We set out to investigate companies’ use of hedging, surveying the practices of more than 100 mid-sized companies based in Finland, Sweden, Denmark and Norway. These companies represent over 10 industry sectors and provide a good benchmark for assessing and developing 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, see what the best practices are among your mid-size peers. BENCHMARKS The study provides extensive peer benchmarking material for companies looking to assess and develop their financial risk management plans. ALTERNATIVES Not every technique or approach will suit your circumstances. CFOs and 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. 2 / HEDGING STRATEGIES 2019
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