Abstract
This study aims to examine the relationship between enterprise risk management (ERM) implementation and firm performance in Malaysia. Using the sample from 2010 to 2016, this study examines the relationship between ERM and firm performance among Malaysian top 100 public listed firms registered on the Index FTSE Bursa Malaysia 100 (FBM100) KLSE. This study also provides comparisons before and after the introduction of Bursa Malaysia Guidelines 2013. This study shows a positive and significant coefficient between profitability and firm performance towards ERM implementation. However, this study shows insignificant relationship between firm size, financial leverage and audit firm with firm performance. This study also shows that there is an increase in the mean score and standard deviation of these variables after the implementation of Bursa Malaysia Guideline 2013. The findings in this study provides an understanding to the Malaysian public listed firms on the importance of ERM and subsequently, maximise the benefits of ERM especially after the introduction of Bursa Malaysia Guidelines 2013 for the benefits of their stakeholders and regulatory improvement in future.
Highlights
All firms would face a multiplicity of risks in strengthening their internal strategies and struggling for their external difficulties
This study aims to examine the relationship between enterprise risk management implementation and firm performance in Malaysia
This study suggests that profitability influence firm performance
Summary
All firms would face a multiplicity of risks in strengthening their internal strategies and struggling for their external difficulties. The speed of innovation and changes in the global business environment has created great opportunities to the firm It has provided critical challenge for the management to determine the type of risks the firm is facing and how much is the risk tolerance that their firms able to accept in order to create value and avoid highly complex of potential risks (Purnama, 2014; Chielotam, 2015; Mowlaei, 2017; Albasu and Nyameh, 2017; Beasley, Branson & Hancock, 2017). Enterprise risk management is known to be a more holistic approach as compared to traditional risk management in managing risk It gives firms a greater awareness about the risks facing the organisation and the ability of the firm to respond effectively to the risk. This will lead to increase in efficiency and effectiveness of a firm‟s operations
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