Finance, Risk Management & Corporate Governance

Day One

What is Finance & Working Capital – liquidity or bankruptcy

• Finance is a numbers game

• Yet finance is more than the numbers

• The three major components of finance

• Working capital (WC) defined

• Relationship to a current ratio

• Components of WC

• Inventory

• Accounts receivable

• Cash

• Accounts payable

• Notes payable

• The critical rations to compute

• What should they be & why

• The questions to ask

• The answers you want

Day Two

Capital Structure – what it is & why it is important

• Equity capital - what it is

• Equity capital – calculating it costs/required rate of return

• Debt capital – what is it really

• Debt capital – calculating it costs/required rate of return

• Weighted Cost of Capital (WACC) – why it is so important

• Calculating your WACC

• When & how to use WACC

• Leverage: two-edged sword - defined

• Operating leverage - calculated

• Financial leverage - calculated

• Combined leverage – Wow! Look at the impact

Day Three

CAPEX - Analysis of Investment Decisions with What-if Risks

• Cash Flows and the Time Value of Money

• Discuss the capital project evaluation process

• Ideas for the future with a multiple time periods horizon

• Estimating cash flows within the business system

• Net present value (NPV) & Internal Rate of Return (IRR) as preferred methods

• Profitability Index (PI) & Modified Internal Rate of Return (MIRR) as reasonable alternatives

• Defining the approval criteria and review process

• Post-implementation audits of capital projects

• Refinements of Investment Analysis

• Dealing with Risk and Changing Circumstances – how do we explain?

• Cost of Capital and Return Standards

• Benchmarking Discount & Hurdle rates

Day Four

Risk Management as an integral part of Corporate Governance

• Understanding uncertainty and risk/opportunity

• Identifying strategic financial risks

• Identifying operational risks

• Identifying functional financial risks

• Assessing financial risks in each perspective

• Finding our personal risk profile (appetite for risk)

• Clarifying desired outcomes, expected outcomes, and actual outcomes

• Performance measures – the need for FRM/ERM

• Quantitative and qualitative risks

• Developing FRM/ERM strategy – do we need a CRO?

• Other risk issues to be concerned with: Joint ventures, alliances, product liability, environmental risk, outsourcing risk, growth risk, R&D risk, natural disasters, catastrophic risks, supply chain risk, reputation risk, and psychology of risk among others

Day Five

Corporate Governance

• What is Corporate Governance?

• Corporate Governance environment

• The relevance of Corporate Governance

• Perspectives on Corporate Governance

  • Shareholders vs. Stakeholders

  • Voluntary vs. Enforcement

  • 1-tier vs. 2-tier boards

  • Chairman/CEO duality

  • The independent director

• Corporate Governance models

• Structure & practices

• Emerging trends in Corporate Governance

• Principal-Agent theory and applications

• Independence in fact versus appearance