Traditionally, corporate investment decisions have assumed that managers are fully-rational, unbiased, unemotional - perfect calculators of risky situations. However in the real world human imperfections and biases frequently adversely influence the financial decisions we make.
This course draws upon the latest cutting-edge thinking in behavioural corporate finance and how an understanding of this can help to improve investment decision-making and maximise profitable returns in the presence of risk and uncertainty. In doing so it abandons the assumption of investor rationality and considers instead how to recognise the tipping point between value-creation and value-destroying projects, how to maximise the returns on capital structure, securities, asset pricing and M and A activity, and how to avoid project entrapment. Behavioural decisions will be analysed from both the individual investor and the finance professionals’ perspectives, and will focus on the practical application of managing assets and investment portfolios for maximum return.
What does the course cover?
This two-day workshop focuses on how to maximise value-added returns by understanding how managerial psychological biases and emotions impact corporate financial decision-making.
It builds on latest thinking and research in behavioural finance and draws upon real world examples to help understand how to maximise value-added returns on investment performance.
The course will be supported by the book Behavioural Corporate Finance: Decisions that Create Value.
On completion of the course, participants will understand:
- how psychological biases and emotions can impact corporate finance, investment appraisal, dividend decisions and capital structure decisions
- the tension between paying dividends and investment
- how to avoid project entrapment, overconfidence and excessive debt
- how to improve value-creation through better financial investment decisions
- how to manage assets and investment portfolios for maximum returns
How you will benefit
Leave with an understanding of how to maximise value-added returns by: - understanding managerial biases, and the methods for overcoming them. - knowing how to use the concept of behavioural finance to manage assets and investment portfolios - being able to better recognise the tipping-point between value-creation and value-destroying projects
How your organisation will benefit
- improved understanding of the impact and effects of psychological biases on organisational financial decision-making
- better asset management and investment portfolio returns
- improved capability to avoid value-destroying projects and investment behaviour
Dr Richard Fairchild
Dr Richard Fairchild is Senior Lecturer in Corporate Finance in the School of Management at the University of Bath.
After obtaining his undergraduate degree in economics, Dr Fairchild worked in the aerospace industry for several years, focusing on project finance. Here, he observed first-hand some of the managerial biases affecting financial decision-making. He then returned to academia to obtain his master’s degree in economics and PhD in corporate finance.
His academic research focuses on behavioural and emotional corporate finance. He advises financial institutions on behavioural issues. Professor Fairchild is editor-in-chief for the International Journal of Behavioral Accounting and Finance, and is a book series editor for the Routledge Research Series on Behavioural Economics and Finance.
Who should attend
This course is intended for anyone investing in or trading in the financial markets, finance managers, accountants, project managers and all managers and executives involved in or affected by financial corporate decisions.