Magazine article Risk Management

The Educator's Approach to Risk

Magazine article Risk Management

The Educator's Approach to Risk

Article excerpt

From derivatives to product defects, today's business schools are teaching the world's future leaders to recognize and manage the full gamut of risks. A sizable number of risk-oriented subjects revolve around financial risks. For example, the Harvard Business School offers courses on topics from futures, forwards, options, portfolio diversification, foreign exchange and interest rate risk, to pension funding and recognizing obligations for investing, notes David E. Bell, a professor of business administration at Harvard. The basic financial risk course may also touch upon such topics as public relations and reputational risk, insurance, political risks and general organizational risks. Harvard has also offered a class on worker safety, focusing on what the corporation knows and what safety considerations should be communicated to employees.

Likewise, the Columbia Business School offers the requisite amount of courses devoted to financial risk management and organizational issues such as total quality management. Broadening the definition of risk, one international business seminar analyzes corporate practices with regard to international human rights norms. Another course on human resource management and government regulation examines age, race and sex discrimination, sexual harassment, retirement programs, occupational safety and health, and drug testing. Meanwhile, Columbia's course devoted to management of the socially responsible corporation explores the impacts of challenging and stressful events such as consolidation, retrenchment, restructuring, hostile takeovers and corrupt practices."

In this increasingly complex world, current business leaders have also found a need for a greater understanding of risk. As such, many executive MBA programs now prominently feature risk management in their curricula. One such school is the University of Virginia's Darden Graduate School of Business Administration, which offers a "Valuation, Risk Management Strategy and Financial Engineering" program that covers such topics as shareholder relations in a foreign environment, foreign exchange risk management, futures and forwards, application of option pricing models, and pricing of derivative securities.

Another of Darden's executive education programs on mergers and acquisitions looks at "selecting a merger candidate that constitutes either a good fit with existing operations or that diversifies the risks of annual operations. …

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