Abstract
As the most critical aspect of risk culture, risk awareness is increasingly seen as informal driver in a firm’s risk management system influencing results and contributing to a firm’s strategic advantage. This study examines the mediation effect of risk awareness on the relationship between formal enterprise risk management (ERM) implementation and company performance. The investigation is based on survey data from 121 non-financial companies in Austria. Hence, I contribute to strategic ERM research by addressing the role of risk awareness in a formal ERM system and explore its benefits. Results support a positive association of formal ERM implementation and company performance and a mediation effect of risk awareness. Furthermore, respondents occupying a controller position but being responsible for the company’s overall risk management process have a more conservative perception of a firm’s performance.
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