Advancing Corporate Valuation: Integrating Risk and Uncertainty

Dear Colleagues,

Risk management promotes corporate success when risks are adequately considered while making business decisions. The decision-oriented focus of risk management is also emphasized by the COSO Enterprise Risk Management Framework. There is still a need for improvement in companies regarding the necessary adaptation of processes and the methods that make it possible to weigh up return and risk when making decisions. Simulation-based valuation methods that combine corporate planning and risk analysis using a Monte Carlo simulation are particularly relevant here. Research has not yet dealt with many possible queries.

This Special Issue aims to explore the intersection of corporate valuation, risk management, and managerial decision-making by addressing key theoretical and empirical questions, including but not limited to the following:

• How can the method of simulation-based assessment be used to combine risk analysis, planning and decision preparation (conceptually, case studies)?
• What clarifications and additions to COSO ERM would be desirable in order to provide companies with clearer guidelines for the decision-orientation of risk management?
• What quantitative methods can companies use to weigh up the effects of decisions in terms of profit and risk? Which decision criteria are theoretically sound and can be used in practice? What significance do simulation-based evaluation methods have in this context?
• Which empirical study results prove the advantages of the decision-orientation of risk management (e.g., with regard to financial performance or company value)?
• How should risk management be integrated into the process of preparing management decisions and what are the obstacles to such integration in practice?

This Special Issue welcomes theoretical and empirical contributions that provide new insights into the role of risk management in corporate decision-making and valuation.

Introductory Literature:

• Blatter, A. B., Ernst, D. and Lang, S. M. 2024. Diversification in Business Valuation https://doi.org/10.1515/jbvela-2024-0024 Received July 15, 2024; accepted October 15, 2024; published online December 9, 2024
• Ernst, D. 2022. Simulation-Based BusinessValuation: Methodical Implementation in the Valuation Practice. Journal of Risk and Financial Management 15: 200. https://doi.org/10.3390/jrfm15050200
• Gleißner, W. 2019. Cost of capital and probability of default in value-based risk management, in: Management Research Review, Vol. 42, No. 11, pp. 1243–1258
• Gleißner, W. and Berger, Th. 2024. Enterprise Risk Management, in: Risks 12(12), 196, https://doi.org/10.3390/risks12120196, Download: https://www.mdpi.com/2227-9091/12/12/196/pdf
• Hunziker, S. 2021. Enterprise Risk Management, Modern Approaches to Balancing Risk and Reward, Edition Number 2, Publisher: Springer Gabler Wiesbaden
• Nocco, B. W. and Stulz, R. M. 2022. Enterprise Risk Management: Theory and Practice: Journal of Applied Corporate Finance: Vol. 34, No. 1, pp 81–95

Prof. Dr. Werner Gleißner
Guest Editor

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• enterprise risk management (ERM)
• corporate valuation
• risk and uncertainty
• simulation-based valuation
• decision-oriented risk management
• financial performance
• risk aggregation
• strategy valuation