Existence Of Risk Management Committee Research Articles

The role of risk management committee between risk-taking behavior and companies’ performance

PurposeThis research aims to examine the moderating role of the existence of risk management committee between risk-taking behavior and companies’ performance.Design/methodology/approachResearch sample includes 383 manufacturing company-year that listed on the Indonesian Stock Exchange period of 2017–2020. The risk-taking behavior includes the use of leverage, capital intensity, research and development intensity, and earnings uncertainty. The hypothesis test uses company fixed-effect regression.FindingsThe result shows that risk management committee moderates the effect of risk-taking behavior on companies’ performance. This research also finds the similar result when risk management committee and risk-taking behavior are examined on the future performance. In the further analysis, the result also finds that the expertise of risk management committee moderates the effect of risk-taking behavior on companies’ performance.Originality/valueThis research contributes to fill the previous gap of risk-taking behavior and companies’ performance by considering the existence of risk management committee to promote oversight role on risk-taking behavior. This research also contributes to give new evidence in Indonesia about the role of risk management committee to improve the benefits or to reduce the costs of risk-taking behavior.

Risk Management Committee and Textual Risk Disclosure

This research examines the relationship between the risk management committee and textual risk disclosure. Textual risk disclosure is measured using the use of a risk-contained tone in the annual report. We employed empirical analysis for the Indonesian listed firms for the period 2010 to 2018. The findings of this research suggest that the existence of the risk management committee gives more risk disclosure. This finding implicates that firms with a risk management committee will give more risk disclosure, because they have a specific committee which have abilities concerning firm risk. The first additional analysis suggests that the results are more pronounced for firms within the period after the regulation to have a risk management committee was applied in Indonesia. We also make second additional analysis for different level of technology within industry. The existence of risk management committee for managing risk disclosure is more pronounced for company within high level of technology industry. We provide several contributions to the users of the financial statements such as shareholders and other stakeholders, especially regulatory bodies in Indonesia.

CORPORATE GOVERNANCE AND BUSINESS PERFORMANCE: THE MODERATING ROLE OF EXTERNAL AUDIT QUALITY

The purpose of this study is to investigate the relationship of corporate governance attributes, i.e. board size, age diversity, risk management committee and internal audit function with the business performance of the organisation. In addition, this study also examines the role of external audit quality as a moderating effect in the relationship between corporate governance and business performance. The study adopted a quantitative approach and cross-sectional design where it used a sample of 120 listed companies in Malaysia for the year 2016. Data is collected based on secondary data which is annual report year 2016. The result shows board size and the existence of risk management committee are negatively significant related to business performance while the other variables such as age diversity and internal audit function do not have an impact on business performance. Unexpectedly, external audit quality does not play a moderating role in related corporate governance and business performance. The study contributes to the understanding of the relationship between corporate governance and business performance in the developing country. The paper also provides related insight for regulators, policymakers and investors of emerging markets such as Malaysia. The study is the pioneer to understand the relationship of the risk management committee to business performance and moderating effect of external audit quality.

Analysis of Corporate Governance Effect and Characteristics of Companies on the Existence of Risk Management Committee

This study aims to analyze the influence of corporate governance and company characteristics on the existence of the Risk Management Committee (RMC) and type of RMC, whether separated and combined with the audit committee. Variables are broken down into independent commissioners, auditor reputation, market risk, leverage and company size. The statistical method for testing hypotheses is logistic regression analysis. Samples collected using random sampling are included in eighty manufacturing companies listed on the Stock Exchange for 2012-2017. This study uses agency theory, company legitimacy, and signal theory to explain the relationship between variables. This study shows that several independent variables have a positive effect on the existence of RMC, namely the size of the company. as well as the independent variables that positively influence the existence of a separate RMC are the size of the company.

Risks Management and Corporate Performance of Business Enterprises in Jalingo Local Government, Taraba State

This study evaluated the relationship between risk management and corporate performance of Twenty (20) organization register with CAC in Jalingo Taraba state because Risk Management is an integrated framework and monitoring tool for managing uncertainties surrounding the business objectives. To achieve that, this objective was formulated. To provide empirical evidence of the extent to which RM framework has impacted performance in the business sector in Jalingo. The independent variables used were existence of risk management committee, the existence of financial expertise, the existence of audit committee, existence of Chief risk officer, and board size. The study data were sourced from annual reports and accounts of the selected enterprises. The collated data were analyzed using descriptive statistics and correlation matrix. The results reveal that risk management committee, financial expertise, audit committee, and board size have significant positive effect on performance. The result also shows that the existence of chief risk officer has a significant negative effect on performance. The study, therefore, recommended that the regulatory authorities and other relevant institutions are enjoined to reassess their supervisory role with the view to strengthen the RM process and taking the issue of risk management seriously at every level of organizations to provide reasonable assurance.

Corporate Social Responsibility, Board Structure, and Gender Diversity: Evidence from Australia

Purpose: Corporate governance in Australia is currently undergoing a transitional and contentious period regarding whether and how to integrate corporate social responsibility (CSR). This paper aims to understand how corporate governance relates to CSR performance in Australia by examining two areas of corporate governance: board and gender diversity. Design/methodology/approach: Data covering the period 2002 to 2016 are analysed by three methods, including OLS, panel regression and dynamic GMM. Corporate governance is operationalized with five variables: board size, board independency, chairperson independency, existence of risk management committee, and special committee devoted to corporate sustainability/CSR. Gender diversity is operationalized with four variables: percentage of female directors, percentage of female managers, gender of CEO, and gender of chairperson. In addition to individual variables, this study also develops overall indices of board structure and gender diversity, respectively. Four aspects of CSR performance, namely corporate social performance, corporate environmental performance, controversies over CSR, and greenhouse-gas emissions from corporate activities are included. Synthesizing data from SIRCA, Thomson Reuters Asset4 and Morningstar, we have a sample of 2,250 firm-year observations. Findings: This study identifies factors that positively relate to CSR performance, including a board that consists of more directors, more independent directors, more women, a risk management committee and a special committee devoted to CSR. Moreover, board structure and gender diversity also negatively relate to controversies over CSR, yet no relation between corporate governance and greenhouse-gas emissions is identified. These findings are robust to different analysis methods. Originality/value: Findings indicate that even if directors’ duties have been not explicitly extended to the interests of other stakeholders, the extant requirement of duties also to some extent encourages CSR performance. But corporate governance in Australia does not appear to adequately consider issues of greenhouse-gas emissions and climate change. Regarding board subordinates, findings in this study reveal that two voluntarily formed board committees, namely the risk management committee and CSR committee, positively relate to CSR performance. Extending prior studies in Australia, this study provides a more comprehensive picture of how board structure and gender diversity relate to CSR performance.

Enterprise Risk Management and Performance of Selected Listed Consumer Goods Companies in Nigeria

Enterprise Risk Management (ERM) is an integrated framework and monitoring tool for managing uncertainties surrounding the business objectives. This study evaluated the relationship between enterprise risk management and performance of Twenty (20) consumer goods companies listed on the Nigerian Stock Exchange. The independent variables used are existence of risk management committee, existence of financial expertise, existence of audit committee, existence of Chief risk officer and board size. The study adopted ex post facto research design and data were sourced from annual reports and accounts of the selected Consumer Goods Companies. The collated data were analysed using descriptive statistics and generalised least square. The results reveal that risk management committee, financial expertise and board size have significant positive effect on performance. The results also revealed that existence of audit committee has a significant negative effect on performance while existence of chief risk officer has no significant effect on performance. The study therefore recommended that the regulatory authorities and other relevant institutions are enjoined to reassess their supervisory role with the view to strengthen the ERM process and taking the issue of risk management seriously at every level of organisations to provide reasonable assurance.

Determinants of the Financial Performances of Commercial Banks in Ethiopia: From Internal Corporate Governance Practice Perspective

ABSTRACT The purpose of this study is to examine the determinants of the financial performances of commercial banks in Ethiopia from an internal corporate governance practices perspective using time series data covering the period of 2008-2013. In the study, financial performance is measured by ROA and ROE of the banks. The study finds that qualified directors in the board, directors with prior experience in banking, chief executive officer compensation and existence of risk management committee in the board have a statistically significant and positive effect on banks’ performance in terms of both ROA and ROE; whereas ownership dispersion has a statistically significant and negative effect on banks performance. The effect of frequency of board meeting on financial performance of bank is positive and significant in terms of ROA, but significant and negative in terms of ROE. On the other hand, variables such as board size, female director in the board, and the existence of audit committee in the board did not have a statistically significant effect on bank’s performance.

The Effect of Corporate Governance and Firm Characteristics on Firm Performance and Risk Management as an Intervening Variable

Abstract The purpose of this study is to examine the effect of corporate governance and firm characteristics on the existence of Risk Management Committee and the effect of the existence of the Risk Management Committee on firm performance. In addition, this study also examines the intervening role of Risk Management Committee on the relationship between corporate governance and firm characteristics and firm performance.The population in this study were non-financial companies listed in Indonesian Stock Exchange for the 2013 financial year and purposive sampling is used as sampling method. Data for this study were taken from company's annual report. The hypotheses were tested by using Partial Least Squre (PLS). The result proved that corporate governance and firm characteristics affect the existence of Risk Management Committee, and the existence of Risk Management Committee affects firm performance. The result also proved that Risk Management Committee act as an intervening variable among corporate governance and firm characteristics on firm performance.