Enterprise Risk Management Implementation Research Articles

Implementation of Enterprise Risk Management (ERM) Framework in Enhancing Business Performances in Oil and Gas Sector

This study empirically investigated the ERM Implementation model and proposed framework to identify and manage risks in Oil and Gas Sector in Malaysia. The study examined the role of ERM framework implementation in improving business performance by utilizing Economic Value Added as a measurement tool. The study also provides insights to the Oil and Gas Sector to gain higher profit returns, reduce cost of capital, and improve shareholders value. Moreover, it contributes significantly in the field of Enterprise risk management in Malaysia. The identification and management of risk is significant to organizations in managing risks efficiently. Expectations of stakeholders of the organization are high from executives and board of directors in managing the risk effectively. Linear regression analysis is utilized in analyzing the data obtained from the data collection performed for this paper. Purposive sampling has been employed in order to select the firms that are operating in Malaysian oil and gas sector. Primary data has been utilized to collect data with the help of structured questions and interview techniques that involve semi structured questions. The results of the regression analysis conducted for in this study suggested that a significant and positive relationship between Enterprise Risk Management with operational risk; market risk; political risk; health, safety and environmental risk; and, also business performance.

The role of internal audit and audit committee in the implementation of enterprise risk management

The study evaluates the role of internal audit in the implementation of enterprise risk management (ERM). The study examines relationships between the competency, independence and working priority of internal audit and ERM implementation and moderating effects of audit committee support on the relationships. A survey on listed companies in Malaysia with internal audit units indicates that the internal audit independence is significantly related to the implementation of ERM for review and feedbacks. The study finds that internal audit work priority contributes significantly to the ERM implementation at all stages. The support by the audit committee is important in enhancing the effectiveness of internal audit in the ERM implementation particularly for the development of policy and procedures and strategy and follow-up actions. The inclusion of companies which outsource internal audit services to outside parties may enhance the validity and generalisability of the results.

Factors Affecting Implementation of Enterprise Risk Management: An Exploratory Study among Saudi Organizations

Factors Affecting Implementation of Enterprise Risk Management: An Exploratory Study among Saudi Organizations

The role of internal audit and audit committee in the implementation of enterprise risk management

The role of internal audit and audit committee in the implementation of enterprise risk management

Mediating Effect of Enterprise Risk Management on Quality Communication and Performance of Malaysian Public Higher Educational Institution: A Conceptual Framework

Enterprise Risk Management (ERM) was introduced many years ago and currently implemented by many countries as well as organizations due to positive impact, especially in their performance. Besides, it is an approach that is useful to helps organization in order to manage the risks for better outcome. In Malaysia, it was first implemented around ten years ago and the organizations are recommended to use it as a tool or basis to recover any potential risks. ERM is believed as an effective technique to manage the risk and is fast becoming the best practice standard. Therefore, the factors that influence ERM implementation in organization should be taken into consideration. Hence, the aim of this paper is to construct a conceptual framework that describes the relationship between quality communication and organizational performance. This relationship will mediate by ERM implementation. The area of this paper will be focus on Malaysian Public Higher Educational Institution (IPTA), which are 20 institutions that listed under Ministry of Higher Education (MOHE).

Making Sense of a Story: Illustrations from a Case Study of Enterprise Risk Management

The concern of this paper is methodological. It reports on how methodology and methods are coupled with the theory used in a case study. This is illustrated from my study on transformation of management control from a monologic form to a heterogenic one through the implementation of Enterprise Risk Management (ERM) in an Egyptian firm. Having stimulated by the critiques developed against positivistic research in management, this paper explains what philosophical rationales justified this methodological choice and how a particular theoretical framework advanced an argument about how the above transformation occurs. The paper concludes that case study research can only be acceptable if the story is suitably theorised to make contribution to knowledge.

Does the hiring of chief risk officers align with the COSO/ISO enterprise risk management frameworks?

PurposeThere are two main industry-sanctioned enterprise risk management (ERM) models, that is, COSO 2004 and ISO 31000:2009, that firms refer to when implementing ERM programs. Taken together, the two ERM models specify that firms should implement ERM programs to meet a strategic need, improve operations and reporting or to comply with government regulations or industry best practices. In addition, the focus of ERM implementation should be either the subsidiary, business unit, division, firm/entity or global level. The purpose of this study is to investigate whether firms are aligning their ERM implementations with these tenets: strategy, operations, reporting, compliance and the level of implementation.Design/methodology/approachThe proxy for ERM implementation is the hiring of a Chief Risk Officer (CRO). The research data come from a sample of 122 US firms that issued a press release following the hiring of a CRO between 2010 and 2014. The press releases were retrieved and aggregated through content analysis in LexisNexis Academic.FindingsThe results reveal that many ERM implementations are occurring at the firm/entity level, and with the exception of reporting, firms consider ERM to be a strategic firm resource capable of improving business operations and compliance initiatives.Originality/valueThere is a dearth of research studies specifically investigating whether ERM programs adopted by firms are aligned with the specification of COSO 2004 and ISO 31000:2009 frameworks. The apparent lack of a clear understanding of the alignment between the firm ERM programs and the industry’s ERM frameworks may limit the development and implementation of ERM and the eventual realization of the benefits associated with a successful ERM implementation.

Enterprise Risk Management Implementation Maturity in Non Bank and Financial Companies

Previous studies of ERM implementation mostly using dummy variable to figure out relation with its determinant. Until today, studies that using risk management maturity as real variable are limited. Therefore, this study intends to determine the maturity level of ERM implementation in non-financial companies listed on Indonesia Stock Exchange during period 2015 and influence of firm’s total assets, total employee, leverage and public ownership to the ERM maturity. The method use are qualitative and multiple regression analysis. The result of data analysis showed that ERM implementation in selected sample during 2015 are still low (majority in initial and repeatable level). In addition, from determinant factors only total asset that have significant influence to the ERM maturity. This result implies that non-financial listed companies are vulnerable to risks. Management should consider future benefit of a mature ERM, not only to comply with regulation.DOI: 10.15408/etk.v16i2.5440

Enterprise Risk Management and firm performance: an integrated model for the banking sector

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.

Penerapan Manajemen Risiko Perusahaan dan Nilai Perusahaan di Sektor Konstruksi dan Properti

Implementation of Enterprise Risk Management and Firms' Value at Construction and Property Sectors The objective of this study is to emphasize the effect of enterprise risk management (ERM) and control variable i.e: firm size, leverage, profitability, sales growth, shares volatility, and dividend policy toward firm value. This research employs multiple regressions as tool of analysis. The object of this research is construction and property firms that listed on BEI in period 2012-2014. The result of this research showed that ERM and control variable have a significant effect on firm value. However, partially, ERM doesn’t have significant effect on firm value. Further more leverage and sales growth variable have significant effect on firm value. The other funding is that size, leverage and dividend policy have significant correlation on ERM. DOI: 10.15408/ess.v7i2.4981

Aligning Corporate Governance with Enterprise Risk Management Adoption in the Nigerian Deposit Money Banks

The alarming rate of corporate failures as seen universally has necessitated this study apparently; the failures have known no boundary as it cuts across both the very big organizations and the very small corporate entities especially financial industries. The objective of this study is to align corporate governance (CG) with Enterprise Risk Management (ERM) adoption in the Nigeria Deposit Money banks (DMBs). The study adopted cross-sectional research design, survey method and questionnaire technique to collect data in 21 Nigerian DMBs. A total of 722 questionnaires were distributed, out of which 435 were found usable for further analysis. The research adopted Structural Equation Modeling in Stata for the data analysis. Empirical evidence suggests that internal audit effectiveness, human resource competency and top management commitment were positively significant. This implies that there is a significant positive relationship between CG and ERM adoption. Conclusively, the study has provided insightful results for the banking industry, regulators, practitioners and academia that will potentially assist in policy formulation, implementation and evaluation. Thus, a clarion calls for all the stakeholders in the industry to guarantee broad implementation of ERM in all the banks in compliance with the CBN Code of corporate governance.

Integration of enterprise risk management and management control system: based on a case study

This paper aims to discuss the concepts and methodological issues of enterprise risk management (ERM). The case study of company A shows that ERM has been implemented and integrated with management control as a means of monitoring its subsidiaries. First, ERM system was implemented through comprehensive review of corporate risk policies, risk management processes, roles and responsibilities, and risk culture. Second, company A integrated ERM with the existing management control system in order to evaluate the risk underlying the current management activities. Finally, ERM implementation was expanded to all subsidiaries so that each business unit would be delegated for its own risk management. This paper provides insight on the process how group-level internal auditors can use ERM as a tool to manage risk of subsidiaries, thereby filling the gap between academic research and practice. This successful ERM adoption case can be used as a guideline for other organizations, which plan to adopt ERM with reduced costs and improved processes.

Does Enterprise risk management enhance operating performance?

The Committee of Sponsoring Organizations (COSO) Enterprise Risk Management (ERM) framework (COSO-ERM) indicates that the development of an enterprise-wide risk assessment and management process is designed to “provide reasonable assurance regarding the achievement of entity objectives.” We examine this issue and hypothesize that firms with mature ERM processes should achieve greater operational performance than those with less mature risk management processes. This study relies on internal audit function management survey responses matched with archival firm level data to gain a better understanding of the expected operating performance impact of the multi-stage ERM implementation process. After controlling for board governance and other known effects, we find that firms with higher levels of ERM process maturity are characterized by higher operating performance than their industry peers utilizing performance metrics closely related to the earnings process. Our study provides support for the linkage of enhanced operating performance associated with the maturity of ERM processes and suggests other potential areas of ERM research.

The Integration of ERM and Strategy: Implications for Corporate Governance

SYNOPSISSince the early 2000s, expectations have increased for organizations to strengthen corporate governance with enterprise risk management (ERM) processes, with the accounting profession playing a major role in these efforts. The ultimate goal of an effective ERM process is to help boards and senior executives to manage risks in the context of strategy so that the organization is more likely to achieve its key objectives. We conduct semi-structured interviews of 15 ERM champions to provide insights about whether the ERM process is integrated with the strategic-planning and execution processes of the firm. We find that while the decision to launch ERM often is based on a desire for ERM to provide strategic value, the integration of ERM with strategy typically is limited. We then examine the ERM implementation process to identify possible ERM implementation practices limiting ERM's integration with strategy. We find that organizations' (1) culture and approach to preparing for ERM's launch, (2) ERM leadership structure, and (3) management of key risks appear to limit the intersection of ERM and strategy. Our summary of key findings highlights important considerations for boards of directors, executive management, and auditors as they assess the effectiveness of their risk oversight efforts in overseeing the strategic direction of the enterprise.

Enterprise Risk Management and the Survival of Small Scale Businesses in Nigeria

Small scale enterprises are catalysts and engine room for economic growth and development as demonstrated by the achievements recorded by Chinese industrialists and other developed nations. Over the years, the rate at which small scale businesses are collapsing in Nigeria is quite alarming due to poor approach to risk management. The economic development of any nation most especially developing economies is instituted on the survival of small scale industries. Small scale industries in Nigeria are fundamentally different from other nations of the world in terms of nature and structure. Many researchers have identified various risks such as financial, strategic, hazard etc. risks militating against the growth of small scales industries which the implementation of enterprise risk management has helped in addressing without due consideration to risk oversight of an appointed risk expert. This paper which employed secondary data sourced from various journals and other publications and used Ordinary Least Square (OLS) in the analysis and testing of hypotheses identified and advocated for the implementation of risk oversight as panacea for enduring and survival of small scale businesses in Nigeria. It has been recommended that in order to appropriate the full benefits of risk oversight concept, the SMEs managers must embrace transparency, adequate maintenance of proper books of account and readiness to implement all the recommendations of the professional or risk experts.

Assessment of the Enterprise Risk Management (ERM) in the Nigerian Banking Industry

This study aimed at evaluating enterprise risk management practice by Deposit Money Banks in Nigeria. Evolving from the research were three specific objectives which were reconstructed into research hypotheses. The hypotheses investigated the relationship between objections and challenges faced by Nigerian banks, government policy, risk and acceptance of enterprise risk management by Nigerian banks. The study utilized an Ex-Post Facto design. A sample of 374 respondents extracted across six geopolitical zones in Nigeria responded to a re-validated 5 points Likert Scale questionnaire. Data extracted from the collection was evaluated using ordinary least square OLS regression analysis. The study revealed that various challenges of practicing banks significantly influences the level of acceptance and implementation of ERM in Nigeria, the government policies on ERM has a direct and significant relationship on the practice of ERM by players in the industry and that the practice of ERM has positively influenced the performance of the Nigerian banks that have accepted and implemented ERM. The study recommended that apex institution should devise a strategic plan and framework to help banks in the implementation of enterprise risk management since it has been adjudged to be the industry best practice in line with Basel III accord.

Implementation of the ERM concept in Serbia: Comparative analysis: Real sector and financial sector

The paper analyzes the level of development regarding risk management, with a special focus on ERM (Enterprise Risk Management) implementation in the Serbian companies. The aim is to raise the awareness regarding the successful risk management implementation in the companies in Serbia, using the bank sector as the benchmark and the example of good practice. The research was conveyed in 2015 and it confirmed the general trend that the companies in Serbia were more inclined to use traditional methods regarding risk management, that the ownership structure influenced the level of ERM awareness in the companies and finally that the Serbian companies lacked the supporting organizational structures and adequate systems of internal controls which would contribute to the successful ERM implementation.

Could Enterprise Risk Management (ERM) Create, Protect and Enhance Shareholders’ Wealth Among Malaysian Listed Issuers

The primary objective of this study is to explore the extent to which ERM implementation is capable of enhancing shareholders’ wealth. A sample of 283 companies operating in the Main Market of Bursa Malaysia was selected. This study utilized the definition of ERM as the independent variable and shareholders’ wealth as dependent variable. The overall observation revealed that ERM was significant in explaining the variation in shareholders’ wealth. Objective setting, event identification, risk response, control activities, information and communication, and monitoring substantiated the hypothesized relationship. The research framework of this study, which utilized assumptions from stewardship and agency theory, could serve as guidance for future research on organizational control and governance. The study fills the gap in literature which mostly concentrated on the USA and western countries. The CRO and the board should focus more advising functions at the earlier stage of the ERM implementation and monitoring functions once ERM matured.

Contribution of enterprise risk management and internal audit function towards quality of financial reporting in universities in a developing country

Quality of financial reporting is limited to issues of compliance to statutory provisions under which state enterprises in Zimbabwe operate, usefulness of the reports produced and their impact on the national fiscus. It is thus measured by way of compliance to these expectations and is indicated by way of a disclosure index signifying the presence of each of the expected aspects. This study therefore sought to establish the contribution of enterprise risk management and internal audit function towards the quality of financial reporting in universities in Zimbabwe. The study adopted a desktop analysis where relevant literature was reviewed. Quality of internal audit function was found to influence quality of financial reporting in that the strength, or quality, of the IAF will contribute to a distinctly different control environment depending on the strength of the good corporate governance in the university. Findings of this desktop research have undoubtedly revealed the gaps in the governance processes in state universities and it is envisaged that a careful analysis of these lacunas will provide a guide in the development of strategies and policy that strengthen state enterprise governance processes. It is hoped that this will help the parent ministry in charge of state enterprises, and, the relevant management of specific state enterprises to determine the magnitude of resources and efforts for implementation of efficient and effective enterprise risk management, internal audit function and corporate governance systems.

The Moderating Role of Intellectual Capital Between Enterprise Risk Management and Firm Performance: A Conceptual Review

Nowadays, businesses have focused more to develop effective risk management practices to enhance firm performance as managers and decision makers are considering holistic view of risk management despite of silo-based context. In recent years, many organizations have improved their performance by utilizing ERM framework to manage diversified range of risks because enterprise risk management (ERM) is considered as most admirable practice in this era. Therefore the current study will help to investigate the influence of ERM on the firm performance by the moderating role of intellectual capital in relationship between ERM and firm performance. As, the firms with higher intellectual capital could more likely withstand the effects of unanticipated changes in economies and markets. Nonetheless, in future, the proposed framework and research model will also be empirically validated in the context of emerging country such as Pakistan, which will definitely contributes by filling the gap in the literature by delivering a clear deliberation for ERM implementation to achieve firm performance.