Impact of Corporate Governance on Achieving Desired Corporate Hedging Outcomes

Author

• Shweta Chitalia, Harrisburg University of Science and TechnologyFollow

Completion Date

Fall 10-2-2026

Document Type

Thesis

Degree Name

Master of Science (MS)

Program or Discipline Name

Project Management

First Advisor

Tedd Wheeler

Abstract

Corporate derivative hedging is intended to manage financial exposures, stabilize cash flows, and support organizational risk-management objectives; however, limited public evidence exists regarding how governance structures influence hedge evaluation, approval, and timely execution. This qualitative descriptive study examined how corporate governance was publicly described in relation to derivative hedging among large U.S. nonfinancial corporations. The study analyzed one publicly available Form 10-K filing from each of 25 purposively selected S&P 500 nonfinancial firms reporting active derivative hedging programs. Data were collected from SEC filings and organized in an Excel-based audit trail containing a document log, excerpt-level coding records, codebook, firm memos, discrepant-case log, and cross-firm comparison matrix. Qualitative content analysis used a PMBOK-aligned framework to examine risk evaluation, schedule-related timing evidence, and governance controls.

The findings showed that firms consistently described derivatives as tools for managing underlying economic exposures, protecting cash flows, reducing earnings and funding-cost volatility, and mitigating interest-rate, foreign-exchange, and commodity-price risks. Governance disclosures varied across firms. Some companies disclosed formal risk committees, Board oversight, policy limits, counterparty controls, or delegated authorization levels, whereas others disclosed hedge-accounting documentation and effectiveness testing without identifying transaction-level decision rights. Direct evidence concerning approval-cycle duration, decision latency, market-window access, and trade-execution speed was largely absent from the analyzed filings.

The study concludes that public annual filings provide stronger evidence about hedging objectives and risk controls than about the timing and authority structures governing individual hedge transactions. The findings may assist Boards, risk committees, and treasury leaders in distinguishing policy oversight from transaction-level execution authority and may inform future research using internal governance records, interviews, or transaction-level data.

Recommended Citation

Chitalia, S. (2026). Impact of Corporate Governance on Achieving Desired Corporate Hedging Outcomes. Retrieved from https://digitalcommons.harrisburgu.edu/dandt/105