Finance with Risk Management and Corporate Governance

Overview:

Introduction:

This training offers insights into the world of corporate finance, risk, and governance. It offers an overview of the interaction between management and all other stakeholders. Diverse and complex stakeholder demands are best met by an efficient allocation of resources over an extended period.

Program Objectives:

At the end of this program the participants will be able to:

• Understanding Corporate Financial Reporting: Specify the exact nature and scope of corporate financial reporting.

• Critiquing Reporting Concepts: Identify and criticize specific concepts, rules, and procedures in place for corporate financial reporting.

• Importance of Working Capital: Understand how and why working capital is critical in today’s world.

• Significance of Capital Structure: Understand how and why capital structure can make or break a firm.

• Effective Capital Budgeting: Learn how capital budgeting can go wrong if not performed properly.

• Overcoming Reporting and Governance Limitations: Identify and overcome limitations inherent in corporate financial reporting and/or corporate governance.

Targeted Audience:

• Risk and Compliance Managers.

• Middle managers who require a more in-depth understanding of the concept of governance & Risk Management for state & Public Sector.

• Senior Officials in national, provincial, V, and local government.

• Staff who support the Board or with responsibility for governance.

• Heads of Departments, Directors, Senior Managers, Managers, Company Secretaries, accountants and Finance Professionals responsible for Governance & Risk Management.

• Executives and Senior Officials of state-owned companies, and as well listed, non-listed organizations.

Program Outlines:

Unit 1:

What is Finance & Working Capital – Liquidity or Bankruptcy:

• Finance Beyond Numbers: Finance is a numbers game, yet it encompasses more than just numerical figures.

• Understanding Finance Components: Explore the three major components of finance.

• Working Capital Definition: Define working capital (WC) and its significance.

• Components of Working Capital: Examine the components of working capital including inventory, accounts receivable, cash, accounts payable, and notes payable.

• Critical Ratios and Computations: Learn about critical ratios to compute and understand their importance.

• Asking the Right Questions: Discover the essential questions to ask and the desired answers in financial analysis and decision-making.

Unit 2:

Capital Structure:

• Understanding Capital Structure: Define capital structure and its importance.

• Equity Capital: Explore what equity capital is and how to calculate its costs/required rate of return.

• Debt Capital: Examine the concept of debt capital and methods for calculating its costs/required rate of return.

• Weighted Cost of Capital (WACC): Understand the significance of WACC and how to calculate it.

• Leverage Analysis: Define leverage as a two-edged sword, including operating leverage and financial leverage calculations.

• Impact of Combined Leverage: Explore the significant impact of combined leverage.

Unit 3:

CAPEX - Analysis of Investment Decisions with What-if Risks:

• Capital Project Evaluation Process: Discuss cash flows, time value of money, and the capital project evaluation process.

• Estimating Cash Flows: Analyze methods for estimating cash flows within a business system.

• Evaluation Methods: Compare NPV, IRR, PI, and MIRR as preferred methods for investment analysis.

• Approval Criteria and Review: Define approval criteria and review processes for capital projects.

• Risk Management in Investment Analysis: Address risk management and dealing with changing circumstances in investment analysis.

• Cost of Capital and Return Standards: Benchmarking discount and hurdle rates for investment decisions.

Unit 4:

Risk Management as an Integral Part of Corporate Governance:

• Understanding Financial Risks: Identify and assess strategic, operational, and functional financial risks.

• Personal Risk Profile: Determine personal risk profiles and appetite for risk.

• Performance Measures: Discuss the need for financial risk management (FRM) and enterprise risk management (ERM) strategies.

• Quantitative and Qualitative Risks: Differentiate between quantitative and qualitative risks in risk assessment.

• Developing Risk Management Strategy: Address developing FRM/ERM strategies and the role of a Chief Risk Officer (CRO).

• Other Risk Considerations: Explore various risk issues such as joint ventures, product liability, environmental risks, and emerging trends.

Unit 5:

Corporate Governance:

• Defining Corporate Governance: Explain the concept of corporate governance and its relevance.

• Corporate Governance Environment: Discuss the corporate governance environment and its perspectives.

• Stakeholders vs. Shareholders: Compare shareholders and stakeholders in corporate governance.

• Board Structures: Contrast 1-tier and 2-tier boards, as well as Chairman/CEO duality and the role of independent directors.

• Corporate Governance Models: Explore different corporate governance structures, practices, and emerging trends.

• Principal-Agent Theory: Discuss the application of principal-agent theory in corporate governance.