Corporate Governance Optimisation

Game Theory, Risk and Hedge Accounting

Choirunnisa Arifa, Sardar Islam

• Publisher: Routledge
• Year: 2025
• eBook ISBN: 9781040415368
• Topic: Business
• Subtopic: Accounting
• Index: Business

Corporate Governance Optimisation introduces an innovative approach to addressing some of the most pressing challenges in modern corporate governance. Combining game theory, mechanism design and hedge accounting, this research monograph offers a comprehensive framework for resolving agency conflicts, mitigating financial risks and improving organisational performance. At the heart of this book is an integrated model that unites governance, risk management and hedge accounting, demonstrating how these elements work together to address information asymmetry, incentive misalignment and decision-making complexities. Grounded in rigorous research and real-life data, the book provides practical insights into how hedge accounting can stabilise financial outcomes, support effective governance and enhance corporate value.

Designed for academics, researchers and professionals in accounting, finance and corporate governance, this book bridges theory and practice, offering a robust foundation for understanding and applying advanced governance models. It is particularly valuable for those interested in how mathematical frameworks like game theory can be used to solve real-world corporate challenges. While rooted in financial optimisation, the book's findings have broad implications for policy, strategy and risk management in diverse organisational contexts.

Table of contents

• Cover
• Half-Title Page
• Series Page
• Title Page
• Copyright Page
• Table of Contents
• List of Figures
• List of Tables
• Preface and Summary
• List of Abbreviations
• 1 Introduction
• 2 Issues in Corporate Governance: Hedge Accounting, Mechanism Design, Corporate Finance and Risk Management
• 3 A Conceptual Framework for Corporate Governance Mechanism and a Case Study Background
• 4 A Corporate Governance and Financial Management Model: Game Theory and Mechanism Design as an Optimisation Problem
• 5 The Numerical Corporate Governance Model: Specification and Results
• 6 Designing Corporate Governance Mechanisms: Optimal Corporate Finance and Accounting Risk Management Strategies
• 7 Corporate Governance Optimisation Implications: Hedge Accounting as Risk Management Strategy and Mechanism Design for Resolving Agency Problems
• References
• Appendix A Summary of the Financial Models
• Appendix B Beta Calculations
• Appendix C Historical Dividend Payments
• Appendix D Summary of Interest Revenue and Interest Expense Rates Calculations
• Appendix E Values of Financial and Economic Parameters
• Appendix F Calculations for the Changes in Fair Values of Debt: Unhedged Position
• Appendix G Calculations for Fixed-Rate and Floating-Rate of the Swap
• Appendix H Fair Value Changes of Swap Calculation
• Appendix I Summary of the Numerical Models
• Appendix J Results of the Model Simulation
• Appendix K Pro Forma Accounting Reports
• Appendix L Results of the Modified Model Simulation
• Index