Shyshkina Olena, PhD in Economics, Associate Professor, Associate Professor of Department of Finance, Banking and Insurance, National University «Chernihiv Polytechnic», Chernihiv, Ukraine

ORCID ID: 0000-0002-8946-1027
e-mail: shyshkina.olena.v@gmail.com

Principles of Financial Risk Management of Industrial Enterprises

Introduction. The article substantiates the need for financial risk management of industrial enterprises and proves the timeliness of development of an effective risk management system, which, in turn, will create new requirements for mechanisms, methods and principles of management. Understanding the principles of financial risk management will make it possible to investigate the links between elements of the risk management system of an industrial enterprise more thoroughly; to identify and assess the risks timely; and to develop and implement the set of measures to minimize them.

Purpose. Thus, the purpose of this study is to identify the basic principles of financial risk management in the context of ensuring the sustainable functioning and development of industrial enterprises.

Results. Management principles derive from management relations that are formed by the business entity and determine the general and specific requirements for risk management system, its structural elements, and organization of management process itself. The structure of the principles of financial risk management of industrial enterprises consists of the following three groups: general management principles that relate to the management system in general; specific principles that relate to individual components of the management system; and special principles that regulate the peculiarities, rules, and order of management of specific phenomena (types activities, operations, etc., and, in particular, financial risks). In our opinion, general principles should include the principles of purposefulness, systematicity, hierarchy, integration, optimality, flexibility (adaptability), cyclical development, management regulation (ordering of actions), formalization, continuity in time and timely awareness. Specific principles consist of principles of modeling, openness of extension of borders and quality of socio-economic systems, priority directions of risk management development, compliance of the set goals with the allocated resources. Special principles include the principles of loyalty to risk, predictability, provisioning, minimizing losses and maximizing income, transferring and avoiding risks through insurance.

Conclusions. Understanding the principles of financial risk management contributes to the development of an effective risk management system at the enterprise, which will be able to minimize the negative impact of external and internal factors on its operation and development.

Keywords: financial risk, industrial enterprise, financial risk management, management principles, management system.

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