Corporate Risk Management Research Articles

An investigation into factors affecting corporate risk management in ASEAN-4 Countries

An investigation into factors affecting corporate risk management in ASEAN-4 Countries

DO RISK MANAGEMENT DISCLOSURE AFFECT FIRM VALUE THROUGH PROFITABILITY?

Investors are parties who determine a company’s sustainability because the funds invested by investors are a source of funds for the company. Investors do not only consider financial statements but also the nonfinancial side, namely the value of a company and how the company manages risk. The company’s value can be seen from the fair market value of the share price. If the stock price of a company is high, the value of the company is also high, thereby increasing investor confidence in investing. Therefore, this study examines the effect of enterprise risk management disclosures on firm value through profitability. The design of this research is quantitative research with hypothesis testing. The population in this study are banking companies listed on the Indonesia Stock Exchange from 2018 – 2020. The sampling technique used is purposive sampling so that a sample of 40 companies is obtained. The research period used is three years (2018 – 2020) which has total sample data is 120. The analytical method used is multiple linear regression using the SPSS version 23 application to process the data. The test results prove that the Company’s Risk Management Disclosure positively affects Firm Value and Profitability. While profitability does not affect firm value and does not have a significant impact on mediating the influence of corporate risk management on firm value.
 Keywords: enterprise risk management disclosure, firm value, profitability

Corporate reputation and hedging activities

AbstractThis study examines whether corporate reputation affects derivative hedging. We posit that high‐reputation firms are more likely to engage in hedging due to greater reputation costs and/or their commitment to lower financial risks. We find that high‐reputation firms are more likely to engage in hedging, especially when their hedging efforts or effects are more observable to stakeholders. We also find that high‐reputation firms are less likely to disclose the notional values of hedging positions and that interest rate hedging by high‐reputation firms is detrimental to firm value. Our results shed light on the impact of reputational concerns on corporate risk management and disclosure policies.

Linking open innovation and competitive advantage: the roles of corporate risk management and organisational strategy

PurposeThis study aims to analyse the effects of (1) open innovation on corporate risk management, organisational strategy and competitive advantage, (2) corporate risk management on organisational strategy, and (3) organisational strategy on competitive advantage. In addition, it assesses (4) the mediating effects of corporate risk management on the relationship between open innovation and organisational strategy.Design/methodology/approachThis exploratory and transversal study takes a quantitative methodological approach based on survey data from 251 hotel executive directors from Portuguese small and medium-sized enterprises (SMEs).FindingsThe results confirm relationships between open innovation and corporate risk management, organisational strategy, and competitive advantage. They also confirm the importance of corporate risk management for organisational strategy and organisational strategy for achieving competitive advantage. The research demonstrates that corporate risk management has a mediating effect between open innovation and organisational strategy.Research limitations/implicationsThe present study proposes a model which provides better knowledge of the relationships between open innovation, corporate risk management, organisational strategy and competitive advantage. The model uses various scales to create a robust analytical measurement instrument. This research provides an in-depth analysis of the psychometric properties of the structural model’s latent variables through PLS-SEM and shows the differentiated paths of the endogenous and exogenous constructs. Finally, the importance of the role of open innovation in the process of attracting the resources necessary, that is, organisational and technological resources, to successfully operate in the hotel sector is highlighted. Thus, this research fills existing gaps in the literature.Practical implicationsThis research can contribute to the development of new instruments and programmes to improve the operational performance of SMEs in the hospitality sector. Understanding the relationship between the constructs will allow top managers to strengthen corporate resources, technologies and dynamic capabilities, and to promote entrepreneurial policies to enhance the relationship between open innovation and competitive advantage. Ultimately, the results of this study will allow governments, national, regional and local, to create policies, programmes and incentives to help firms adopt or extend the open innovation model, thus promoting the exchange of internal and external knowledge and strengthening the dynamics of the business ecosystem.Originality/valueThe paper discloses the relationships between open innovation, corporate risk management, organisational strategy, and competitive advantage, by identifying the main characteristics of the constructs and revealing the linkage between them. This pioneering study analyses the mediating effect of corporate risk management between open innovation and organisational strategy and those mentioned above.

ESG Factors in Corporate and Social Risk Management System as an Infrastructure Element of Cross-Border Business

The paper is devoted to the analysis of current factors of ESG (Environmental Social and Corporate Governance) sustainable development. The paper shows how the ESG agenda is implemented in practice, as well as what changes in legal regulation or behavior of investors, counterparties, consumers of products and services may be associated with it. The author examines to what extent ESG standards are included in the risk management strategy of cross-border business. The risk management system is a set of techniques and methods that allow you to accurately predict the occurrence of risk events. Risk management standards presuppose the choice of both «positive» and «negative» aspects (risks). The term «aspect» is intended to identify the consequences, probabilities of risk, its matrix in the long and short term. The most successful are the standards of the so-called best practice, most often they are called «integrated risk management».The paper highlights the chains of concluded contracts, considers the environmentally friendly management solutions embedded in them. The paper substantiates the categorical apparatus of two directions of risk management, influenced by ESG factors: social risk management and corporate risk management. The paper argues for a procreditor’s approach to the risks of improper distribution of corporate assets, the formation of valuation and regulatory capital reserves. It is shown which of the problematic debts gives rise to a corporate group of debtors-borrowers to claim and whether it is worth resorting to a foreign jurisdiction in this regard. The author admits that social risks range from such a root cause as conflicts of socially significant interests to more complex legal structures, the basis of which is formed by contradictory processes of coordination of corporate investment strategy. As a result, even the minimum legal standards detailing insurance risks are of lasting importance, with the comparability of the risks of social and credit groups.

Injury Impoverished: Workplace Accidents, Capitalism, and Law in the Progressive Era

Injury Impoverished: Workplace Accidents, Capitalism, and Law in the Progressive Era

Internal Audit and Corporate Risk Management: A Literature Review

Internal Audit and Corporate Risk Management: A Literature Review

Automated text mining process for corporate risk analysis and management

Automated text mining process for corporate risk analysis and management

ESG Concept as the Newest Determinant of Corporate Risk Management Strategies of Multinational Enterprises

ESG Concept as the Newest Determinant of Corporate Risk Management Strategies of Multinational Enterprises

ESG Concept as the Newest Determinant of Corporate Risk Management Strategies of Multinational Enterprises

ESG Concept as the Newest Determinant of Corporate Risk Management Strategies of Multinational Enterprises

Social Responsibility, Risk Management and Financial Performance of Military Enterprises

How to make a benign interaction between military enterprises’ social responsibility and financial performance is of great significance for military enterprises to actively undertake social responsibility, but the academic research on corporate social responsibility and financial performance has not reached a consistent conclusion, and there is a lack of intermediate variables in the study of the relationship between the two. Taking the listed companies of the A-share military industry in 2011-2019 as the research sample, the relationship between military enterprise social responsibility and financial performance and the role mechanism of risk management were explored. It is found that the social responsibility of listed military enterprises positively affects financial performance; corporate social responsibility will promote corporate risk management, which can significantly improve corporate financial performance, that is, risk management plays an intermediary role between corporate social responsibility and financial performance. The research conclusion provides practical guidance and experience reference for military enterprises to clarify the relationship between social responsibility and financial performance and its functional mechanism.

RISK MANAGEMENT IN THE CONTEXT OF CORPORATE GOVERNANCE: DOMESTIC EXPERIENCE

Abstract. The purpose of this article is to assess the formal manifestations of taking into account the principles of risk management in the domestic corporate governance system. A low or satisfactory tendency of the domestic corporate sector to assimilate the rules of corporate governance abroad may also indicate in advance the lack of active risk management in domestic companies in the context of corporate governance. The survey participants' awareness of the importance of the "Risk Management" function of the supervisory board regarding the state of corporate governance in Ukraine does not automatically guarantee the implementation of this function in practice. The results of the analysis of the reporting of joint-stock companies, whose shares are included in the calculation of the PFTS index, indicate the absence and/or lack of disclosure of information regarding the relationship between risk management and corporate governance at domestic enterprises. The leading role of corporate management bodies, in particular the supervisory board, in the formation of long-term risk management policy, including and corporate. The domestic corporate sector as a whole is characterized by a satisfactory level of corporate governance, which indicates incomplete compliance with the principles of corporate governance developed by the international community. Domestic practitioners of corporate governance have formed the correct attitude in theory to the role of the supervisory board in risk management. In practice, according to the results of the assessment of joint-stock companies included in the calculation of the PFTS index, in the context of corporate risk management, insufficient attention is paid, and the reports are of a formal nature. Strengthening the relationship between corporate governance and risk management is possible provided that measures and disclosure of information are implemented in the following directions: constant monitoring of the risk management system and disclosure of information regarding risk management; identification of significant risks; determination of the risk profile of corporate bodies; remuneration for risk management in the short and long term; principles of risk management; reporting to the board.

An analysis of moderating effect of investment decisions on the relationship between corporate risk management and financial performance of deposit taking savings and credit cooperative societies in western Kenya

An analysis of moderating effect of investment decisions on the relationship between corporate risk management and financial performance of deposit taking savings and credit cooperative societies in western Kenya

The Impact of Financial Culture on the Operation of Hungarian SMEs before and during COVID-19

The main aim of this study is to explore the conceptual framework of corporate financial culture and its practical relevance in an emerging Central European market economy, at the level of the Hungarian SME, with a special emphasis on the Hungarian SME sector. In our study, we highlight each dimension of corporate financial culture, focusing on the established corporate financial culture index, and within it, we examine the significance of the financial management elements sub-index and the risk and insurance sub-index separately. In addition, we look for logical, causal, and statistically verifiable relationships between corporate financial literacy and the outcome of corporate financial decisions and corporate risk taking. The relationships were broken down over two years in the analysis. Approximately 2167 responses were included in the 2019 sample and 3281 in the 2021 sample. These representative samples were taken from the Hungarian SME sector and multiple linear regression models were built to find a significant moderation effect of financial literacy between perceived risks and the insurance activity of companies. We conducted our research in two different periods, the unique feature of which is that we conducted a survey before and during the coronavirus crisis, so we could make a comparative analysis. The method used in this research study is a literature review analysis of reference manuscripts, discussing topics related to financial literacy, corporate risk management, and corporate financial management, published in the last 10 years. Our results show that there are positive and significant relationships between company management, corporate risk management, and corporate financial literacy. The results of our study draw the attention of company leaders to the practical significance of financial culture—efficiency, profitability, and stability.

Influence of Capital on Firm Value Through Enterprise Risk Management in Banking

This study aims to prove and analyze empirically how capital affects firm value and interaction that happened between capital and corporate risk management affects firm value. The hypothesis of this study relates to the effect of capital on firm value at banking companies in Indonesia, and the second hypothesis relates to the effect of capital on corporate risk management at banking companies in Indonesia. The results of statistical analysis for testing the fourth hypothesis are obtained that regression coefficient value is -0.079, and t-count value is -1.510 with a significance value is 0.133, which is greater than the error tolerance set at 0.05. It shows that capital does not have significant effect on firm value in banking companies listed on the IDX for the 2016-2020 period. While the results of statistical analysis for testing the ninth hypothesis obtained a regression coefficient value is 0.213 and t-count value is 2,453 with a significance value is 0.016, which is smaller than the error tolerance set at 0.05. It shows that interaction between capital and enterprise risk management has a significant effect on firm value in banking companies listed on the IDX for the 2016-2020 period.

THE EFFECT OF ENTERPRISE RISK MANAGEMENT DISCLOSURE, CORPORATE SOCIAL RESPONSIBILITY DISCLOSURE, AND PROFITABILITY ON THE VALUE OF MANUFACTURING COMPANIES LISTED ON THE IDX FOR THE YEAR 2019-2020

In making investment decisions, of course, investors must pay attention to financial and non-financial aspects. In the financial aspect, of course, it can be seen through the level of company profitability. Meanwhile, in the non-financial aspect, potential investors can use the company's non-financial information such as corporate risk management and corporate social responsibility. This study aims to provide empirical evidence of the influence of financial aspects, namely profitability and also the influence of non-financial aspects, namely corporate risk management and corporate social responsibility on firm value. The population in this study were all manufacturing companies listed on the Indonesia Stock Exchange during the 2019-2020 period as many as 172 companies. The sampling technique in this study used a purposive sampling technique so that 95 data were obtained from the company's annual report. Analysis using SPSS program with multiple linear regression analysis method. This study provides empirical evidence that the financial aspect, namely profitability, has a positive influence on firm value. Then the non-financial aspect, namely corporate social responsibility, also has a positive influence on firm value, while corporate risk management has no effect on increasing firm value. This study provides information to potential investors that to assess the company can be seen from the financial and non-financial side. This encourages companies to better disclose non-financial information in order to have a positive impact on the company and external parties in need.

Enterprise Governance and Management of Information Technology Based on COBIT 2019

In the age of digital transformation, information and technology (I&T) have become critically important for enterprise support, sustainability and growth. Stakeholder value creation (i.e. realizing the benefits of optimal cost of resources while optimizing risk) is often driven by a high degree of digitalization in new business models, efficient processes, successful innovations, etc. Digitized businesses are increasingly dependent on I&T for survival and growth. Given the centrality of I&T in corporate risk management and value generation, special attention has been given to Enterprise Governance of Information and Technology (EGIT) over the last three decades. EGIT is an integral part of corporate governance. Over the years, the best practice frameworks have been developed and promoted to support the process of understanding, designing and implementing EGIT. COBIT is a framework for the governance and management of enterprise information and technology. COBIT® 2019 builds on and integrates more than 25 years of development in this field, not only incorporating new science knowledge, but also bringing these insights into operational practice. The features and structure of COBIT and the innovations in this version of the framework are discussed. A business case for the effective implementation of COBIT as an approach to improve information and technology management in a corporate environment is also presented.

Press coverage (April 2021 - March 2022) of the release of treated water from nuclear power plant accidents into the sea from the perspective of corporate risk management theory

Press coverage (April 2021 - March 2022) of the release of treated water from nuclear power plant accidents into the sea from the perspective of corporate risk management theory

Attention to climate change and downside risk: Evidence from China.

We explore the role of public climate attention, captured by the Baidu search volume index, in the downside risk. Using 45 keywords from five perspectives related to climate change, we construct a public climate attention index in China. We find a positive and significant relationship between climate attention and downside risk at the market-level and firm-level. Moreover, the risk-increase effect of climate attention becomes more prominent for state-owned and high-carbon-emission firms. Further analysis shows that excellent sustainable performance can moderate the adverse effect of rising climate attention, while the major climate disasters exacerbate the effect. Overall, our findings shed additional light on the important role of collective climate beliefs in corporate risk management and investor decision-making.

FUNGSI INTERNAL AUDIT DAN MANAJEMEN RISIKO PERUSAHAAN: SEBUAH TINJAUAN LITERATUR

In this qualitative study, it became clear that an evolution towards a higher level of risk-based auditing is absolutely necessary, if internal auditors are to play an important role in risk management. The implementation of effective risk management is the key to the success of a company. This article aims to provide a literature review related to the role of the internal auditor function in carrying out effective and efficient risk management. The explanation of this article can add to the literature related to the role of internal auditors in implementing corporate risk management and can assist company management in selecting internal auditors so that company goals can be achieved. Thus, the company can have an optimal level of risk according to the company's risk appetite. Internal auditors are also required to uphold the professional standards of internal audit in carrying out their duties so as to provide the best guarantee for the company.