Abstract
This study investigates how the implementation of Enterprise Risk Management program affects the performance of firms using an Enterprise Risk Management model for the banking sector and an integrated model for measuring Enterprise Risk Management index used in the study by Mukhtar and Soliman (2016). Ten listed commercial banks were selected with the Enterprise Risk Management index as the main independent variable, with Return on Average Equity (ROAE), Share Price Return (SPR) and Firm Value (FV) used as three separate dependent variables. The study provides strong evidence of a positive relationship between Enterprise Risk Management implementation and performance in the Nigerian banking sector. The findings and conclusions of this study are consistent with those of other studies that used data from different industries, providing a basis from which to generalize the findings from this study to firms in other industries.
Highlights
Enterprise Risk Management (ERM) as a discipline has received unprecedented interest and international attention in recent years (Arena et al, 2007)
This study investigates how the implementation of Enterprise Risk Management program affects the performance of firms using an Enterprise Risk Management model for the banking sector and an integrated model for measuring Enterprise Risk Management index used in the study by Mukhtar and Soliman (2016)
We focus on the multiple coefficient of determination (R-squared) which indicates the proportion or percentage of the total variation in the dependent variable explained by the independent and controlled variables, in addition to the ‘adjusted Rsquared’, which provides the same information as Rsquared, but with implicit adjustments for the explanatory variables in the model (Gujarati et al, 2010a)
Summary
Enterprise Risk Management (ERM) as a discipline has received unprecedented interest and international attention in recent years (Arena et al, 2007). The growing interest in ERM has been attributed to a series of challenges in the business world ranging from global financial crises, corporate frauds and scandals, as well as the collapse of major corporate entities (Quon et al, 2012). This has prompted governments, law making bodies, regulators and other stakeholders within the global economic community to explore further insight and understanding of current and emerging risks facing organizations (Paape et al, 2012). Authors summarize the findings and form conclusion before making recommendations
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