Professor Kristine Hankins on Corporate Risk Management and Academic Career in Finance
Professor Kristine Hankins (University of Kentucky) visited the Aalto Department of Finance and the GSF in May 2025 to teach a PhD course on Corporate Risk Management. The course turned out to be extremely popular and we had students from eleven different universities from Finland, the Nordics and elsewhere in Europe attending the course.
We spoke to Kristine and asked about the risks facing corporations today and her own academic career.
Professor Kristine Hankins with the students of Corporate Risk Management course
1. Tell us how you became an academic? Was it clear from very early on that you would go for a PhD and become a professor one day? What made you to choose Finance? What inspires you in your work as a professor?
Fresh out of college, I worked in New York City for a few years. I started in litigation consulting for PriceWaterhouseCoopers and then moved to private equity placement at Merrill Lynch. It was a gift to begin my career in such high energy firms with bright colleagues. However, I quickly realized that I wanted a more autonomous career… which is a polite way of saying I didn’t like having a boss (Ha.) At PwC, I specialized in securities valuation litigation which got me hooked on the art of crafting arguments with numbers. Several senior managers had PhDs and it was clear that their training shaped the way they approached problems. When I started to think about my long-term career goals, moving into academics seemed like a natural fit. Combining the nitty gritty of data work with economic theory to explore how firms and markets work is incredibly rewarding. (And I’m pretty sure that answer makes it plain that I’m too nerdy to work anywhere besides a university.)
2. While visiting us you taught an intensive PhD course on “Corporate Risk Management”. It seems, by casual observations, that corporations today are facing more diverse risks than ever. Apart from the usual risks arising from underlying production and competition there are risks related to climate change, (geo)political situations, new technologies as especially AI may introduce serious threats in production in some industries and so on. Based on your expertise, how well are corporations prepared to tackle these diverse risks?
Absolutely. Firms today face a very challenging landscape of evolving risks particularly in the areas you mention such as AI adoption, cybersecurity exposure, geopolitical uncertainty, and climate change. Economists generally view uncertainty as a hinderance to investment, but great leaders will tackle these challenges head on. The biggest risk is to freeze and not invest in the human capital which will help firms adapt to these changes. Firms also need to think deeply about whether their firm is best organized to respond to this increased level of risk.
3. Tell us about your ongoing research. What are you working on at the moment?
My expertise is how firms are organized to deal with risk. A recent project explores the impact of the 2018 U.S. metal tariffs on auto manufacturers. Economists recognize that a large cost shock, such as a tariff, could result in a higher priced good and it makes sense that vehicle prices would rise in response to more expensive inputs such as steel and aluminum. However, our paper shows the importance of firm organization for responding to cost shocks. Auto manufacturers not only make cars, they often provide financing to consumers. Having a vertically integrated finance unit – a captive finance division – provides these firms with more options for passing through the cost of the tariff. In essence, there are more levers that can move. They can increase car prices. But they also can adjust loan terms. We show that the 2018 metal tariffs actually led to more expensive auto loans from captive lenders and this is the first paper to document that trade policy can impact the cost of consumer credit.
4. It is well known that gender balance in Finance, both among students and faculty, is far from optimal. Much of talent is missed. What can/should we do to attract more female students to business schools and to choose Finance?
Understanding finance is one of the most powerful skills a young person can have in their toolbox. I tell my students that whether they want a raise, hire more staff, or introduce a new product, they will need money. And, simply put, the people with money – whether it’s a banker or a CFO – speak the language of finance. Learning finance allows you to be a better advocate for yourself, your staff, and your ideas and ensure you have access to those resources. More importantly, I emphasize that people are at a disadvantage if they don’t speak that language. The more we can get that message out to all unrepresented groups, the better.
5. What would be your advice for our PhD students? How to make the most out of their time in the PhD program?
Completing a PhD is hard! When you are a student, everyone will tell you to keep your head down and just keep working. But I recommend lifting your head out of the books and looking away from the computer occasionally. Successful academics generally spend three to four decades doing research and teaching after completing their PhDs. It’s much more enjoyable if you connect with the other people in your program, at conferences, and at student and alumni events. As you progress in your career, you’ll want new coauthors, you’ll design new classes, and you’ll need guest speakers. Taking the opportunity to connect and build personal relationships not only will make your professional life more enjoyable, it will make it more productive.
6. You visited us for two weeks at the Department of Finance in Aalto. How was it? Did your expectations about us, Helsinki, and Finland in general match what you experienced?
While I knew Aalto had a premier finance department and Helsinki was a beautiful city with great restaurants, the whole experience far exceeded my expectations and that was entirely due to the people. The finance department faculty and staff were so welcoming and I received excellent feedback on my research. The doctoral students were engaged and class discussions were lively. I also had the benefit of overlapping with other visiting scholars. Layer on top of that a few great meals and you can see why I enjoyed my visit. I whole-heartedly recommend Aalto’s Department of Finance and the Graduate School of Finance to any potential visitor. And I hope to return in the future!
Students doing group work during Corporate Risk Managament lecture
About Professor Kristine Hankins
Kristine Hankins is the William E. Seale Endowed Professor of Finance at the University of Kentucky. Her research interests include corporate finance, corporate risk management, and methodology issues and she is a prior winner of the Jensen Prize.
Prior to her academic career, Kristine held positions with Merrill Lynch’s Private Equity Group and PricewaterhouseCoopers’ Financial Securities Litigation practice, both in New York City. She earned her B.A. from the University of Chicago, a M.S. in Statistics from Rutgers University, and her Ph.D. in Finance at the University of Florida.