Enterprise Risk Management Research Articles

ENTERPRISE RISK MANAGEMENT (ERM) PRACTICES AND FINANCIAL PERFORMANCE: EVIDENCE FROM LISTED INSURANCE FIRMS IN NIGERIA

This study examined the Enterprise Risk Management (ERM) Practices on the performance of insurance firms in Nigeria. The study used panel and correlational designs in investigating the effect of ERM Practices measured by strategy and operations objectives of the Committee of Sponsoring Organisation (COSO) on the financial performance of insurance firms measured by Tobin’s Q. Secondary data obtained from the annual financial statements of the insurance firms for the periods of 2018-2022 were used in the analysis. The study used panel data regression model to estimate the relationship. The findings revealed the existence of a positive significant effect of strategic objectives on the financial performance of insurance firms in Nigeria. However, a negative significant effect of operational objective on the financial performance of insurance firms in Nigeria was documented. The study recommended that insurance firms in Nigeria should continue to ensure full conformity to the provision of COSO components while carrying out their business operation. They should also re-strategize and monitor their financial performance outcomes in line with their established objectives in order to attain the holistic application of ERM strategic objectives in the overall business operations.

Derivative Analysis of Financial Instruments for Risk Management of Small and Medium-Sized Enterprises Based on Fuzzy Evaluation

Derivative Analysis of Financial Instruments for Risk Management of Small and Medium-Sized Enterprises Based on Fuzzy Evaluation

Risk prediction of computer investment database information management system based on machine learning algorithms

In recent years, with the continuous development of the financial market, the risk prediction of computer investment database information management systems (IMS) has high practical value. At present, there are risk issues in the information management system, which may cause drawbacks to investment data processing. To address these issues, this article used Machine Learning (ML) algorithms to analyze the risk prediction of computer investment database IMS. This article introduced and utilized typical Self-Organizing Map (SOM) and Artificial Neural Network (ANN) combination algorithms, regression algorithms, and Gradient Boosting Decision Tree (GBDT) algorithms to compare and analyze the prediction accuracy of these three algorithms. This article found that the GBDT algorithm has the highest prediction accuracy. Through a large amount of experimental data, it has been proven that the average testing accuracy using regression algorithms was 3.5% higher than that using neural network algorithms. It was found that the average test accuracy using the GBDT algorithm was 7.2% higher than the average test accuracy using the regression algorithm. The study also explores the combination of physiological and behavioral data collected by wearable devices to provide more comprehensive risk assessment and decision support, which provides an important reference for the optimization of enterprise risk management. Through this innovative data source integration, this paper provides a new perspective for the application and development of machine learning algorithms in computer investment database IMS.

Enterprise risk management effects on information systems-enabled strategic enterprise management: amplifying firm performance through strategic momentum and strategic flexibility in BRICS economies

PurposeEnterprise Risk Management (ERM) is a strategy and approach that enables organizations to manage risk strategically from a systems standpoint. The ERM assists businesses in structuring their systems to generate strategic flexibility (SF), which leads to increased firm performance (FP) through strategic enterprise management (IS-SEM) and strategic momentum (SM).Design/methodology/approachThe study is based on data gathered in Brazil and India. The complex link was discovered using partial least square structural equation modeling (PLS-SEM) using 330 Brazilian and Indian sample sizes.FindingsThe findings show that ERM influences IS-SEM and SM, which improves SF and FP. Furthermore, the study claims that IS-SEM can help improve strategic momentum and flexibility in the face of environmental uncertainty (ENU). Thus, it indicated that specific combinations of ENU connected with ERM and IS-SEM lead to obtaining high and extremely high levels fuzzy set qualitative comparative analysis (fsQCA) post hoc analysis of strategic momentum and flexibility.Practical implicationsThe findings help executives understand how ERM and accounting information systems (AIS) can help achieve SM and SF, hence promoting FP in situation specific ENU setups in developing economies. The findings enhance executives' comprehension of how ERM and IS-SEM can significantly contribute to achieving SM and SF, thereby driving FP in the situation-specific ENU configurations in developing economies. Originality/valueResearch indicated that specific combinations of (ENU) connected with ERM and IS-SEM lead to obtaining high and extremely high levels fuzzy set qualitative comparative analysis (fsQCA) post hoc analysis of strategic momentum and flexibility.

Enterprise Risk Management: Improving Embedded Risk Management and Risk Governance

We argue for an integrated, decision-oriented enterprise risk management (ERM) system focused on value drivers rather than risk minimization and using quantitative risk aggregation based on the best available information. Our holistic view on ERM includes cultural, organizational, and technical aspects, presenting seven areas for more effective risk governance and resilience grounded in a robust enterprise framework. Our analysis, supported by a structured literature review, covers these seven key areas for ERM development. Our review shows that risk aggregation, quantification, and decision-making support are only covered by a few publications. The paper offers insights on linking risk management with strategic decision-making using risk aggregation techniques (Monte Carlo simulation).

Innovative Approach to Conceptual Design of Enterprise Risk Management Software

The paper shows the integration of the theoretical and practical aspects of designing an ERM software tool. The basic idea of the designed ERM is conceived in the form of an algorithm using the integration of ISO 3100, the COSO framework, the risk matrix designed according to the risk appetite of the observed company, quantitative and qualitative models for risk assessment, and the generation of consequences and mitigating measures for each identified risk. Methodologies for risk assessment in the presented ERM include the following: For business risks, questionnaires were generated for different business areas (from knowledge bases) and the assessment was conducted according to risk matrices. Workplace risk is assessed according to the Kinney method, while technical risks are assessed according to the API 580, 581 standard. Software is created to outbalance problems of all types of risk that may arise regardless of the complexity of the business and the risk itself. The algorithm, model and software were developed and successfully tested in two Serbian companies.

Enhancing Bank Performance: Integrating Enterprise Risk Management with Mobile Banking Applications

This study investigates how the implementation of mobile banking and enterprise risk management (ERM) contributes to the success of financial institutions in a rapidly evolving financial environment. To understand the relationship between ERM, mobile banking adoption, and bank performance, we surveyed 250 senior bankers from the 25 largest banks in Indonesia using Partial Least Squares Structural Equation Modeling (PLS-SEM). Our findings indicate that effective ERM implementation positively affects bank performance. Mobile banking enhances customer convenience, streamlines operations, and broadens market reach, increasing customer satisfaction, operational efficiency, and profitability. Additionally, using mobile banking applications mediates the positive indirect impact of ERM on bank performance. This research highlights that ERM's effect on Indonesian banking performance is partly mediated by adopting mobile banking applications. The study contributes to the literature on RBV theory, which suggests that banks can create innovative ERM strategies and leverage its unique resources, such as mobile banking, to remain competitive and sustain their performance. The innovation aligns with the principles of TAM, which highlights the significance of perceived usefulness and ease of use in technology adoption.

Leverage, Firm Value and Enterprise Risk Management: Evidence from Consumer Cyclical

This study aims to examine the effect of leverage on firm value with Enterprise Risk Management (ERM) being employed as an intermediary variable in consumer cyclical companies This study involved a sample of 209 companies listed in the Consumer Cyclicals sector on the Indonesia Stock Exchange (IDX) for the period 2020 until 2022. Data were obtained from annual reports of public companies in the consumer cycle sector in Indonesia. The data were analyzed using multiple regression analysis facilitated by SPSS software version 21.0. The results of this research show that leverage has a positive effect on firm value and ERM as an intervening variable between leverage and firm value. This study contributes to the limited body of research in exploring the impact of leverage and firm value in emerging markets. Future research could conduct more studies in various industry sectors to generate more insights in this research area.

Crisis management: a post-pandemic framework proposition and lessons learned at Hyundai Motor Brazil

PurposeThis study relies on the lessons learned from the recent pandemic crisis to propose a conceptual framework for organizational crisis management and illustrate its application in an organization that effectively protected its competitive position during the crisis.Design/methodology/approachBuilding upon the resource-based view and the dynamic capability theoretical framework, we first conducted a systematic literature review that involves content and bibliographic analysis. Subsequently, we developed a conceptual crisis management framework and applied it to the case of Hyundai Motor Brazil.FindingsThe systematic literature review found innovation and knowledge management as prominent response mechanisms to the pandemic crisis whereas the case provided a better understanding on how these mechanisms contributed to crisis navigation.Practical implicationsManagers will find valuable insights into the importance of linking risk management and crisis management, and leveraging innovation and knowledge to enhance resilience, with straightforward operationalization for benchmark.Originality/valueThis paper is original for relating enterprise risk management, innovation and knowledge management to each phase of existing crisis management processes. It enriches the theoretical and practical debate on the dynamic capabilities’ perspective of risk and crisis management.

The Effect of Corporation Reputation Mediation on Enterprise Risk Management (ERM) Disclosure and Firm Value

Enterprise Risk Management (ERM) disclosure can support companies to assess various threats and opportunities to maintain the firm's competitive advantage. The aim of this research is to analyze the effect of Enterprise Risk Management (ERM) disclosure on firm value with corporate reputation as a moderating variable. The research method used is an explanatory descriptive quantitative approach. The sample population for this research is manufacturing companies listed on the Indonesia Stock Exchange (BEI) in 2018-2021. The sampling technique used was purposive sampling, so that 38 companies were obtained. Data analysis techniques use inner model, outer model and hypothesis testing with the help of SmartPLS 4.0.9.5 software. The research results show that Enterprise Risk Management (ERM) disclosure and corporate reputation have a positive and significant effect on firm value. Corporate reputation has a positive and significant effect in mediating Enterprise Risk Management (ERM) disclosure on firm value. This research also uses profitability and firm size as control variables. The results of profitability research do not have a positive effect on firm value. Firm size has a positive effect on firm value. Recommendations for further research are to expand the variables used, such as corporate social responsibility, intellectual capital, corporate governance structure.

Revealing The Impact of ERM and ESG Disclosures on The Performance of Non-Financial Public Companies in Indonesia: An Empirical Study From 2017-2022

This study investigates the impact of Enterprise Risk Management (ERM) disclosure on working capital efficiency, profitability, and firm value of non-financial public companies in Indonesia during the period 2017-2022. Additionally, it examines the moderating role of Environmental, Social, and Governance (ESG) disclosure on the relationship between ERM disclosure and these three variables. The research adopts a quantitative approach, utilizing secondary data from companies' annual reports. Working Capital Turnover (WCT) measures efficiency, profitability is assessed by Return on Assets (ROA), and firm value is evaluated using Tobin’s Q ratio. ERM and ESG disclosures are assessed based on the COSO ERM 2017 framework and GRI Standards, respectively. The findings reveal that ERM disclosure has a significant positive impact on firm value but shows no significant effect on working capital efficiency and profitability. Furthermore, ESG disclosure positively moderates the relationship between ERM disclosure and firm value, highlighting the synergistic benefits of integrating robust ERM practices with comprehensive ESG disclosures. This study underscores the necessity for companies to enhance the quality of their risk management and ESG-related disclosures to improve financial performance and corporate value. By providing empirical evidence on the benefits of ERM and ESG disclosures, this research contributes to the literature and offers practical implications for non-financial public companies in Indonesia.

KEY STAGES AND INNOVATIVE APPROACHES IN RISK MANAGEMENT UNDER UNCERTAINTY

The purpose of the article is to analyze in detail the process of risk management at enterprises, in particular, its key stages. In addition, the article aims at studying the current instruments of bankruptcy risk management which can be implemented in the modern economy. The relevance of the article is stipulated by the need to improve approaches to risk management in today's dynamic business environment, where enterprises are constantly facing financial and operational threats. Of particular importance is bankruptcy risk management, since economic instability and high level of competition require effective mechanisms to protect financial stability. The following methods are used in the study: the method of analysis and synthesis - for a structured consideration of the stages of the risk management process, identifying the relationships between them and forming a holistic picture of management actions at each stage; the method of logical generalization - for formulating general conclusions and recommendations on the stages and tools of risk management based on the analysis of literature and practical examples. The result of the study is to determine the essential characteristics of the main stages of the enterprise risk management process and the relevant tools for managing the bankruptcy risk. This includes: a structured description of the key stages of risk management – from risk identification and assessment to monitoring and control, which ensures a systematic approach to responding to threats; analysis of current tools for managing bankruptcy risk – identification of tools that facilitate early detection of risks and support the financial stability of the enterprise. The practical value of the article lies in providing enterprises with a clear description of the risk management process, which includes the main stages from identification to monitoring and control, allowing companies to take a more systematic approach to risk management and reducing the likelihood of negative financial consequences. The use of the current tools for managing bankruptcy risk described in the article provides an opportunity to quickly identify early signs of financial instability, which helps to maintain their financial stability. In addition, the proposed recommendations can be integrated into the enterprise management system, creating a flexible and adaptive model to maintain stable development in the face of economic uncertainty.

The relationship between innovation capability and profitability: The mediating role of enterprise risk management in Amman Stock Exchange (ASE)

In the face of growing competition, industrial and commercial firms need more effective strategies to gain competitive advantages. This study investigates the role of enterprise risk management (ERM) as a mediator in highlighting the significance of innovation capability on profitability in industrial and commercial firms listed on the Amman Stock Exchange (ASE). Data were collected from 244 respondents using a standardized questionnaire and analyzed with SPSS software. The results indicate that the innovation capability has an impact on profitability in industrial and commercial firms, as well as their ERM practices. Additionally, ERM mediates the relationship between innovation capability and profitability. Firms that adopt distinctive innovation strategies tend to maintain formal ERM strategies, which in turn enhance market superiority and profitability. This research offers some significant managerial ramifications that may be essential for business owners, executives, and decision-makers involved in the development of firms.

Executive Characteristics and their Impact on Enterprise Risk Management in the Guangdong-Hong Kong-Macao Greater Bay Area: An Empirical Analysis

Executive Characteristics and their Impact on Enterprise Risk Management in the Guangdong-Hong Kong-Macao Greater Bay Area: An Empirical Analysis

Republic Of Tajikistan: Fiscal Risk Management and Transparency of State-Owned Enterprises

Republic Of Tajikistan: Fiscal Risk Management and Transparency of State-Owned Enterprises

COSO-Based Internal Control and Accounts Receivable Management

ABSTRACT Internal control regulations in China follow the Committee of Sponsoring Organizations (COSO) framework, which promotes enterprise risk management and considers both financial reporting and operations. Using a COSO-based internal control index, we find that internal control plays an important role in accounts receivable management in China. Specifically, internal control quality (ICQ) is associated with greater receivables turnover, less receivable aging, and less receivable impairment, which indicates that ICQ mitigates risk related to receivables and improves receivable management. Our supplemental analysis reveals that additional cash flows from operations are generated when internal control alleviates problems related to receivables. Moreover, ICQ shortens the overall cash conversion cycle, despite faster payable turnover. Because the Sarbanes-Oxley Act Section 404 has a narrower scope and covers only internal control over financial reporting, our evidence regarding the effect of COSO-based internal control on receivable management fills a gap in the extant literature. Data Availability: Data are available from specific sources cited in the text. JEL Classification: M42.

دراسة تطبيقية عن دور إدارة المخاطر في تعزيز الأمن السيبراني للمؤسسات الصغيرة والمتوسطة في المملكة العربية السعودية

This study aimed to evaluate and improve cyber risk management in small and medium enterprises in the Kingdom of Saudi Arabia. The study relied on the descriptive, analytical and inductive approach, using data collection tools such as questionnaires, interviews and case studies. The most prominent results were weak level of use of information technology among 50% of employees. Shipping and delivery procedures policy is the most used at 33%. Antivirus software is the most used security technology at 40%. Fake audio and video attacks represent the biggest obstacle to cyber risk management at 30%. 50% of employees are aware of cyber risks. There is a strong correlation (89%) between employee awareness and cyber risk management. Key recommendations include raising awareness, developing comprehensive policies, conducting periodic risk assessments, investing in modern technologies, building a strong security culture, and providing qualified human resources.

Aligning Enterprise Risk Management into Risk Disclosure of the IPO Prospectus

This concept paper aims to review the potential of aligning Enterprise Risk Management (ERM) elements into risk disclosure of the IPO prospectus. This concept paper explores the potential for aligning ERM elements within the risk disclosure section of IPO prospectuses. The paper emphasizes the regulatory requirement of the risk disclosure in the prospectus. It highlights the importance of risk disclosure in investment decision-making. It contends the best practices of risk disclosure in the IPO prospectus for the benefit of investors and also reinforces the issuing company’s commitment to effective risk management and corporate governance. By incorporating ERM principles, the prospectus not only improves transparency but also strengthens the issuing company’s commitment to effective risk management and corporate governance. The key research objective is to evaluate the integration of ERM into IPO risk disclosures, with particular emphasis on regulatory compliance, investor decision-making, and the enhancement of corporate governance practices. This research endeavors to fill the gap in the literature by enhancing the ERM elements in the existing practices of IPO disclosure.

A Study on Enterprise Risk Management in the Chinese Context

Abstract: The establishment of the market economy, accompanied by the emergence of risks, requires enterprises to consider not only the economy and profitability but also the risk. Therefore, enterprise risk management problems arise. Many developed countries see risk management, strategic management, and operation management as the three main management functions of modern economic organizations, which will become a critical factor in the competitiveness of businesses in the future. Therefore, the paper reviews the development of traditional risk management theory, financial risk management theory, and internal control theory, with a focus on Enterprise Risk Management (ERM). After analyzing the current situation of ERM in Chinese enterprises, the paper proposes suggestions for improving risk management methods, strengthening the internal control system, and enhancing staff quality. Finally, the paper emphasizes the importance of Enterprise Risk Management (ERM) development in China and suggests the need for a risk management system tailored to the countrys specific circumstances.

The Role of Digital Transformation in Enterprise Risk Management

This research aims to study and evaluate the mutual impact between digital transformation and risk management in organizations. While digital transformation offers significant benefits in terms of increased efficiency and innovation, it also presents new challenges related to risk management. The main findings of the research indicate the following: Complexity of the risk landscape: Digital transformation leads to a more complex digital environment, increasing the types and number of risks faced by organizations, such as cyberattacks and data breaches. New opportunities for risk management: Conversely, digital technologies provide advanced tools such as artificial intelligence and big data analytics, enabling organizations to detect threats earlier and respond more effectively. Importance of digital culture: Building a strong digital culture within the organization, where all employees are aware of digital risks and how to address them, is crucial. Integration of technology and management: Organizations must integrate technology into their risk management strategies, considering human and organizational factors. The research recommends the following Developing a comprehensive strategy: Organizations should develop a comprehensive strategy for digital risk management that covers all aspects, from technology to organizational culture.