Företagsekonomiska institutionen

Ekonomihögskolan vid Lunds universitet

Sara Lundqvist

Sara Lundqvist disputerade den 27 oktober 2014. Här berättar hon om sig själv och sin forskning. För att läsa avhandlingen, klicka på länken till höger.

In 2005 I started in an exchange program at Lund University as part of my bachelor studies at the University of California Davis; being Swedish-American, I wanted a chance to leave my home state of California and live and study in Sweden. After falling in love with Lund and my now husband, I returned to Lund in 2007 to begin the Master in Finance program at the School of Economics and Management. It was during this time that the idea to study a PhD occurred to me. Though there have been some academics in my family, my late grandfather was a doctor of psychology and my aunt, his daughter, followed in the same footsteps, I really had no idea what being a researcher or joining academia entailed. But as the end of my Master studies approached, I felt I wasn’t really ready to leave school. I met with Lars Oxelheim and Niclas Andrén, who became my supervisors, just before my Master program ended to express my interest. A few months later, while I was living in China, I received the news that I had been accepted to the program as part of the project Risk Management and Corporate Performance funded by The Jan Wallander and Tom Hedelius Foundation. I can’t say that when I started in January of 2010 risk management held any particular attraction. However, I quickly latched on to the topic of enterprise risk management, and as they say, the rest is history, or a PhD dissertation in my case.

Enterprise risk management (ERM) had become increasingly prevalent in the risk management literature; as firms faced more complex risks and increased pressure for better managed risk, especially post crisis, many firms began to approach risk management in a new way. ERM emerged as a framework for taking into account all kinds of firm risk that could get in the way of a firm being able to pursue its strategy, from financial risks to operational ones, under one formalized and structured risk management system; this meant abandoning the more traditional decentralized “silo” approach to managing risk. Though there had been momentum in exploring ERM, agreement and consensus was lacking in the literature and there were clear opportunities to build on what had been done and answer questions about ERM in a new way. So the purpose of the dissertation is to pursue answers about what an ERM firm looks like, why firms implement ERM, and what effect ERM has on the firm.

In spring 2010, my colleague on the project, Naciye Sekerci, and I surveyed all firms listed on the Nordic stock exchanges about the organization of their risk management; 153 firms, just under 23%, responded. By analyzing patterns in their responses, I identified four underlying pillars of ERM. The identifying component, which separates a firm with ERM from those that do not have it, is the implementation of risk governance. Risk governance is essentially the formal structure and organization where accountability and responsibly within risk management are well outlined; it is the marriage between risk management and risk governance. This provided a new way to think about ERM. This paper was published in the Journal of Accounting, Auditing, and Finance in the summer of 2014. Using this new conceptualization, I also investigate why firms choose to implement risk governance. I found that large firms, with high levels of leverage and higher dividend yields, and where the chief executive officer is on the board of directors have more implementation of risk governance. The final article, written together with Anders Vilhelmsson, uses a sample of the largest banks to investigate whether or not risk management quality, which is ERM measured through keyword searches in the banks’ annual reports, has an effect on the credit risk, or potential of default, of the banks. We find that ERM does have a negative impact on credit default swap spreads, a market measure of credit risk; however, the relationship between ERM and credit ratings is less straight-forward, and when we control for other governance characteristics of the firm, ERM does not have a significant impact on the credit rating of the firm.

Parallel to writing my dissertation, I also spent time in the classroom giving lectures and leading discussions with mainly the students on the Corporate and Financial Management Master program. For the most part, I’ve taught in corporate valuation and theories of corporate finance. I’ve enjoyed teaching and have learned a lot about pedagogy over the course of the years.

Now the focus is on having a successful disputation. When that is over, I’ll have to spend some quality time with my daughter Olivia who just turned one. Besides that, what is next for me is unclear. I’d like to pursue some of my other research ideas related to ERM and continue teaching.