Risk Management

The Risk Management course covers the full cycle of working with risks: from basic threat classification to quantitative models and building an enterprise risk management (ERM) system.

You will learn the methodology and tools of risk management, how to identify risks in an organization's processes, assess their impact and choose a response: mitigation, transfer (including through insurance and hedging), acceptance, or avoidance of the risky activity.

Every business needs risk management, regardless of industry. A risk specialist analyzes the company's processes, strategy and objectives, identifies potential threats and develops measures that reduce losses and help projects deliver results.

After the training you will be able to

• classify risks and sources of hazards;
• explain how a risk management system benefits a company;
• apply risk analysis and assessment methods;
• measure risk exposure;
• build a risk management structure within an organization;
• reduce technological and operational risks;
• plan risk management activities.

Skills you will develop

• analytical risk assessment;
• solving non-standard problems;
• strategic thinking;
• financial literacy;
• acting in changing conditions;
• management and leadership skills.

On completion, participants receive an HSE IPAA certificate of completion for the Risk Management program.

Curriculum

Block 1. Foundations of risk management

• Module 1.1. Introduction to risk management: the concept of risk, the risk management process, qualitative assessment, expected and unexpected losses, the relationship between risk and return.
• Module 1.2. Types of risk: market, interest rate, equity price, currency, commodity, credit, liquidity, operational, legal and regulatory, business and strategic, and reputational risk; interaction of risk factors.
• Key concepts and a test on Modules 1.1–1.2.

Block 2. How companies manage financial risks

• Module 2.1. Corporate risk management: strategies, risk appetite and decision-making, the role of the board of directors, the risk map, hedging and its limitations.
• Module 2.2. Methods and tools: hedging operational and financial risks (price, currency and interest rate); the impact of risk management tools on company performance.
• Key concepts and a test on Modules 2.1–2.2.

Block 3. Organizing risk management

• Module 3.1. Corporate governance and risk management: regulation after the global financial crisis, best practices.
• Module 3.2. Implementation tools: the chief risk officer, the risk committee, the compensation committee, the audit committee, aligning risk appetite with business strategy, interaction between departments.
• Key concepts and a test on Modules 3.1–3.2.

Block 4. Credit risk transfer mechanisms

• Module 4.1. Credit risk transfer: types of credit derivatives, collateralized debt and loan obligations, credit risk mitigation, securitization and special purpose vehicles, lessons of the global financial crisis.
• Key concepts and a test on Module 4.1.

Block 5. Modern portfolio theory and the CAPM

• Module 5.1. Modern portfolio theory, the efficient frontier, the capital market line.
• Module 5.2. Derivation and application of the capital asset pricing model (CAPM), assessment of systematic risk.
• Module 5.3. Performance measures: the Sharpe and Treynor ratios, tracking error, the information ratio.
• Key concepts and a test on Modules 5.1–5.3.

Block 6. Arbitrage pricing theory and multifactor models

• Module 6.1. Arbitrage pricing theory (APT), assumptions and inputs of a multifactor model.
• Module 6.2. Applying multifactor models: calculating expected return, accounting for correlations, hedging exposure to multiple factors, the Fama–French three-factor model.
• Key concepts and a test on Modules 6.1–6.2.

Block 7. Risk data aggregation and reporting

• Module 7.1. Data governance and infrastructure: governance principles, data architecture.
• Module 7.2. Risk data aggregation and reporting: accuracy and integrity, completeness, timeliness, adaptability, clarity and usefulness of reports, frequency and distribution.
• Key concepts and a test on Modules 7.1–7.2.

Block 8. Enterprise risk management and trends

• Module 8.1. Enterprise risk management (ERM): why it is needed, best practices, evaluating program effectiveness.
• Module 8.2. Risk culture, scenario analysis and stress testing.
• Module 8.3. Case studies: liquidity risk, rogue trading, reputational risk, corporate governance, cyber risks, central bank actions in a crisis.
• Key concepts and a test on Modules 8.1–8.3.

For fees and upcoming dates, see the Schedule or get in touch via the Contacts page.