Measuring the economic effciency of corporate risk management

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Risk management, along with financial management are the most important trends of the modern corporate governance, the efficiency of those cannot be determined unambiguously. The most common methods of evaluating are the following: cost and value-based approach, KPI’s, rating assessment. This diversity is the result of the versatility of risk management. Despite the prevalence of these approaches to the evaluation of the successfulness of risk management, it should be mentioned that the problem of its comprehensive assessment of the efficiency is unsolved. The basis of the risk management efficiency is the economic impact of its implication, which evaluation methodology is disclosed in this article. Key worlds: economic impact, risk management efficiency, measurement approach The analysis of the literature on the theory and practice of risk management has demonstrated a relatively small number of studies on the assessment of the efficiency of risk management, as well as a lack of consistency in approaches to the definition of it and its measurement. Summing up the approaches to the definition of risk management efficiency, it should be noted that the main features of an effective system of risk management are: risk management identified most of the factors that create an unfavorable environment for the company's activity; identified opportunities to improve the efficiency of the company; as a result of the measures, the company is ready for any eventuality; is strategically and value oriented system; operatively and promptly responds to changes; positively affects on a persistence of accounting earnings, on a firm performance and value; clearable system with minimum decision choice. At the same time, the risk management is an integral part of business management should therefore meet the basic criteria of business efficiency [2, 4], such as: to be good at turning out maximum outputs given minimum inputs [8]; to be on the verge of production capacity [11]; reduce the cost of debt [12]; create added value for shareholders and stakeholders [10]; create favorable conditions for selffulfillment and professional growth of managers and senior management personnel[5]. From the theoretical point of view, the efficient risk management is a strategy that improves corporate governance in general and represents the ability to cope with environmental risks and uncertainties that could affect variability in net sales and thereby influence the stability of the corporate earning development. From the practical point of view, efficient risk management is a process precisely organized in accordance with the recommendations of standards and programs and is focused on the optimization of the company's profits under risks. In any case, the estimation of economic efficiency of risk management is the starting point in the analysis. The most common methods of assessing the economic effects of risk management is the cost approach and an approach based on determining the net present value of the project for implementation of risk management. The approach based on the economic impact of risk management ( ), which is characterized by a general excess of risk management results over costs: