The “2020 State of Financial Risk Management” study from Chatham Financial found that fewer than half of public companies are using derivatives hedging to mitigate their financial risks. The research, which Chatham conducts every three years, entailed examination of the 2018 10-Ks of more than 1,400 U.S.-based public companies.

This deep-dive review of corporate financial statements revealed that 91 percent of companies face material interest-rate risks, 73 percent face foreign exchange (FX) risks, and 47 percent face commodity risks. However, among those with interest-rate exposures, only 43 percent actively manage the risks through a hedging program. More than half of companies (59 percent) with FX risks hedge them, but only 37 percent of organizations with commodity risks mitigate those risks using derivatives hedging. (See Figure 1, below.)

To find out why the majority of companies aren’t hedging their financial risks, Treasury & Risk spoke with Amol Dhargalkar, a managing director for Chatham Financial who leads the firm’s global corporate sector, assisting corporations with managing interest rate, FX, and commodity risks.

Complete your profile to continue reading and get FREE access to Treasury & Risk, part of your ALM digital membership.

Your access to unlimited Treasury & Risk content isn’t changing.
Once you are an ALM digital member, you’ll receive:

  • Critical Treasury & Risk information including in-depth analysis of treasury and finance best practices, case studies with corporate innovators, informative newsletters, educational webcasts and videos, and resources from industry leaders.
  • Exclusive discounts on ALM and Treasury & Risk events.
  • Access to other award-winning ALM websites including PropertyCasualty360.com and Law.com.

Already have an account?


NOT FOR REPRINT

© 2023 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.

Dig Deeper

 

Treasury & Risk

Join Treasury & Risk

Don’t miss crucial treasury and finance news along with in-depth analysis and insights you need to make informed treasury decisions. Join Treasury & Risk now!

  • Free unlimited access to Treasury & Risk including case studies with corporate innovators, informative newsletters, educational webcasts, and resources from industry leaders.
  • Exclusive discounts on ALM and Treasury & Risk events.
  • Access to other award-winning ALM publications including PropertyCasualty360.com and Law.com.

Already have an account? Sign In Now
Join Treasury & Risk

Copyright © 2023 ALM Global, LLC. All Rights Reserved.