Influence of Family Culture on Enterprise Risk Management in Brazilian Companies

Elisane Brandt,Márcia Zanievicz Da Silva,Franciele Beck

doi:10.1590/1982-7849rac2021190082.en

Abstract

ABSTRACT Context: family involvement creates specific goals that include family interests and values, and is used to pursue the family’s vision, creating effective corporate governance and risk management practices. Objective: our objective is to evaluate the relationship between family influence and enterprise risk management in Brazilian family businesses. Method: data from 142 family businesses was analyzed using descriptive statistics and structural equation modeling. The construct of enterprise risk management comprised: identification, evaluation, response, and communication. Family influence was captured by power, experience, and culture. Results: the results broaden the understanding that, among the three family dimensions investigated, culture is the one that better explains risk management practices. Conclusions: we concluded that the higher the level of family culture, the higher the level of attention to enterprise risk management.

Highlights

In dynamic, complex, and competitive environments, such as those currently faced by organizations, there is pressure for adaptation and survival (Arena, Arnaboldi, & Azzone, 2010; Gordon, Loeb, & Tseng, 2009)
The present study is focusing on the following research question: What is the relationship between the level of family influence and enterprise risk management practices? Our objective is to evaluate the relationship between family influence and ERM in Brazilian family businesses
We focus on four categories of enterprise risk management established by COSO (2004), presented below

Summary

Introduction

Complex, and competitive environments, such as those currently faced by organizations, there is pressure for adaptation and survival (Arena, Arnaboldi, & Azzone, 2010; Gordon, Loeb, & Tseng, 2009). Organizations are exposed to risks arising from business activities, human actions, as well as natural effects (Committee of Sponsoring Organizations of the Treadway Commission [COSO], 2007). Those sources of risk can affect the companies in various aspects, reaching all organizational levels, and are related to different risk perspectives or categories (Arena, Arnaboldi, & Azzone, 2011; COSO, 2004; Woods, 2009). In a recent research published by the ACI Institute — KPMG (2017), it is possible to see that one of the biggest challenges perceived by the organizations is the risk management process. About 41% of respondents consider risk a relevant theme; considering Brazilian respondents this concern is around 54%

Objectives

Results

Conclusion