Enterprise Risk Management Research Articles

Moderating role of enterprise risk management in the relationship between sustainability performance and a firm’s competitive advantage

The emergence of sustainable business practices has garnered interest among stakeholders. However, the question of whether sustainability performance provides companies with a competitive advantage is still being debated in the literature. This paper aims to examine the influence of sustainability performance – namely economic sustainability performance and environmental, social, governance (ESG) – on competitive advantage, with the effectiveness of enterprise risk management (ERM) as the moderating variable. This paper used 202 firm-year observations during 2015–2022 from non-financial sector companies listed on the Indonesia Stock Exchange. To test the hypotheses, panel data regression with a one-year time-lag analysis is conducted. The findings show that economic sustainability performance has no relationship with competitive advantage, while ESG has a positive effect. Furthermore, ERM effectiveness strengthens the effect of economic sustainability and ESG on competitive advantage. Further investigation used a two-year time-lag analysis for a long-term perspective. The analysis shows that economic sustainability performance and ESG have a positive impact on competitive advantage. In contrast, ERM effectiveness has no effect on the relationship between economic sustainability performance and competitive advantage. Moreover, additional analysis incorporates the effect of COVID-19 into the main model and shows that the pandemic did not affect competitive advantage; this is consistent with the main results. The findings encourage companies to improve their risk management and sustainability initiatives. The government may also take it into account when developing rules that promote the implementation of sustainable development. AcknowledgmentThis research was supported by the Ministry of Education, Culture, Research, and Technology of the Republic of Indonesia through the Center for Higher Education Fund (BPPT) and Indonesia Endowment Funds for Education (LPDP) for providing the Indonesian Education Scholarship (BPI-Beasiswa Pendidikan Indonesia).

The Relationship between Respondents’ Characteristics and Their Perceptions of Enterprise Risk Management. Results of a Survey

The present study investigated whether responents’ socio-demographic characteristics influenced their personal views on the adoption and implementation of enterprise risk management. An online questionnaire was administered to employees of Italian artisan firms to collect data on the adoption and implementation of enterprise risk management, its determinants, and its relationship with organisational performance. Respondents’ responses were compared to their demographic characteristics to determine whether gender, age, education, position, and role may have influenced their opinions on enterprise risk management. The presence of a well-established risk culture in an organisation and the support of senior management were considered essential in the effective implementation of enterprise risk management in an organization and in positively influencing organisational performance. Select participant’s demographic characteristics had an influence on their views on the implementation of enterprise risk management. The results of this study add to the body of knowledge on enterprise risk management and can support risk managers to effectively and efficiently implement enterprise risk management.

CyberFusion Protocols: Strategic Integration of Enterprise Risk Management, ISO 27001, and Mobile Forensics for Advanced Digital Security in the Modern Business Ecosystem

This research paper explores the integration of Enterprise Risk Management (ERM), the ISO 27001 standard, and mobile forensics methodologies as a comprehensive framework for enhancing digital security measures within modern business ecosystems. Employing a quantitative research design, this paper utilized a survey methodology, gathering data from 372 professionals across various sectors including risk management, IT/security, and forensic analysis. The analysis was conducted using Partial Least Squares Structural Equation Modeling (PLS-SEM) to test the research hypotheses and assess the impact of the integrated approach on organizational digital security capabilities. The findings reveal a significant positive effect of integrating ERM, ISO 27001, and mobile forensics on an organization’s ability to manage digital risks effectively. Specifically, the integrated approach was found to enhance strategic digital security management, improve the identification, assessment, and mitigation of digital risks, strengthen information security management practices, and elevate the effectiveness and efficiency of digital crime investigation processes. These outcomes underscore the value of a cohesive strategy that leverages the strengths of ERM, ISO 27001, and mobile forensics in addressing the complex and interconnected digital threat landscape. Based on the results, the study recommends adopting a holistic security framework, investing in continuous professional development, leveraging technological advancements for proactive security management, and fostering a culture of security and collaboration. Such measures are crucial for organizations aiming to enhance their resilience against cyber threats and protect their digital assets in the face of sophisticated cyber-attacks. This research contributes to the field of cybersecurity by providing empirical evidence on the benefits of an integrated approach to digital security, offering practical guidelines for organizations seeking to improve their digital security measures, and highlighting the need for continuous adaptation and collaboration in the fight against cyber threats.

Ảnh hưởng của hoạt động quản trị rủi ro đến chi phí vốn vay trong các doanh nghiệp niêm yết tại Việt Nam: Bằng chứng từ chỉ số quản trị rủi ro bất thường

The study examines the impact of enterprise risk management (ERM) on the cost of debt in Vietnamese listed firms during 2010-2020. The effectiveness of enterprise risk management is measured by abnormal enterprise risk management (ABERMI). By applying multivariable regression models, the empirical results show that firms with effective enterprise risk management through low ABERMI will reduce the cost of debt. In addition, the study also proves that firm size, profitability, and the fact that firms are audited by one of the four large auditing companies have negative effects on the cost of debt while firms having high financial leverage increase the cost of debt

INTEGRATING ENTERPRISE RISK MANAGEMENT (ERM): STRATEGIES, CHALLENGES, AND ORGANIZATIONAL SUCCESS

Implementing Enterprise Risk Management (ERM) is pivotal for organizations striving to navigate and excel within increasingly complex and volatile business environments. This paper explores the core principles of ERM and underscores its crucial role in achieving organizational objectives by enhancing decision-making, risk awareness, and resilience. It highlights the benefits and challenges of ERM implementation, with a strong emphasis on the empowering role of leadership in this process. It also emphasizes the necessity for strategic resource allocation, and effective integration into organizational processes. Additionally, the paper examines key factors that contribute to the success of an ERM program, such as adaptability and continuous improvement. Through real-world case studies, the paper illustrates how successful ERM implementation can significantly benefit organizations, demonstrating quantifiable improvements in operational performance and strategic outcomes. These discussions aim to provide a comprehensive understanding of the importance of ERM in modern business practices, advocating for its widespread adoption and continuous evolution to meet emerging business challenges.

The Effect of Enterprise Risk Management, Intellectual Capital, and Corporate Policy Disclosure on Company Value with Good Corporate Governance as a Moderation Variable

This study aims to test and empirically prove the effect of Enteprise Risk Management, Intellectual Capital, and Dividend Policy on Firm Value with Good Corporate Governance as a moderating. The source of this study data uses secondary data from companies available at SP Capital IQ with a total of 141 observations that have met the criteria used using purposive sampling techniques. This study employed quantitative research by using multiple regression analysis with a moderating effect (Moderated Regression Analysis) with the STATA program. The results of the study showed that Enterprise Risk Management had negative influence on firm value, Company policy, namely dividend policy, had positive effect on firm value, and Inttelectual Capital also Good Corporate Governance had no effect on firm value. The study also showed that Good Corporate Governance as a moderating variable strengthens the relationship between company policy, namely dividend policy, on firm value but Good Corporate Governance can’t moderate the relationship between both Enterprise Risk Management and Intellectual Capital on firm value.

Chief risk officer and audit fee: An investigation from financial industries in Indonesia

The appointment of a CRO (Chief Risk Officer) influences the implementation of ERM (Enterprise Risk Management), which reduces risk and lowers audit costs. Financial Services Authority Regulation No.17/2014 in Indonesia requires companies to have an RMC (Risk Management Committee), which is different from a CRO equivalent to a C-Level. This study examines the impact of a CRO on external audit costs. The data consists of financial companies listed on the Indonesia Stock Exchange (IDX) from 2011 to 2020. The results show that companies using a CRO have lower risk, thereby reducing audit costs. Additionally, the expertise of a CRO also impacts a higher ERM, which in turn affects the reduction of audit costs. This study contributes to the practical world by supporting the appointment of a CRO to reduce company risk. Thus, the company can deliver better performance.

Enterprise risk management and firm performance: Exploring the roles of knowledge, technology, and supply chain

Risk management has become crucial for organizations in the current era. Therefore, this study assesses the impact of Enterprise Risk Management (ERM) on an organization’s performance and examines how knowledge management and technology adoption mediate this impact, along with the moderating effect of supply chain resilience based on the resource-based view and dynamic capabilities theory. Utilizing a questionnaire-based survey, data were collected from 297 respondents in Ho Chi Minh City, Binh Duong, and Dong Nai, Vietnam, by cluster random sampling. The data were statistically analyzed using the partial least squares method. The results indicated a positive effect of ERM on financial performance, while the association with non-financial performance lacked significance. Knowledge management and technology adoption fully mediated the positive impact of ERM on non-financial performance and partially mediated its relationship with financial performance. Furthermore, supply chain resilience strengthened the positive link between ERM and financial performance. In conclusion, these findings contribute to advancing the comprehension of the mechanisms and dynamics involved in knowledge management and technology adoption as mediators and supply chain resilience as a moderator, regarding an emerging country. The study enriches the risk management literature and significantly contributes to enhancing firm effectiveness.

Enterprise risk management and corporate tax planning

AbstractThis study examines the impact of enterprise risk management (ERM) programs on corporate tax planning. ERM is a holistic approach to managing an enterprise's entire portfolio of risks. We hand‐collect data on ERM adoption for a sample of Standard & Poor's 500 firms from 1993 to 2016. We empirically document that firms with ERM programs have lower cash effective tax rates than firms without ERM. Additionally, we find that the relation between ERM and tax avoidance is stronger among firms with more business segments. Finally, our results suggest ERM adoption offsets an increase in opacity and tax uncertainty typically associated with tax avoidance strategies. Overall, we provide evidence that ERM allows firms to exploit tax avoidance opportunities through enhanced coordination and communication.

Intelligent Financial Risk Warning for Enterprises Through Knowledge Graph-Based Deep Learning

The financial risk warning methods for enterprises have always been a practical concern. In digital society, the computational intelligence has brought more spirit to this demand. This paper first introduces the current situation of the development of Knowledge graph technology, describes the deep learning fusion method based on Knowledge graph, and expresses the feasibility of this study. Then, according to the requirements of Knowledge graph, it completes the method fusion of core data training and extraction, and completes the adaptive deep learning design for the Beautiful SCOP database, and establishes a STDE-FG financial risk early warning model. Through empirical analysis, the shortcomings of this model were identified, and a comparison of optimized and optimized results was completed. Two aspects of phenomenon can be found from experimental results. For one thing, the accuracy of the unoptimized STDE-FG early warning model has been improved by 37.5–55.3% compared to traditional prediction models, but the prediction value during legal person changes has a greater error than traditional prediction values. For another, the optimized STDE-FG early warning model has also improved its accuracy in predicting new investments and equity changes, with improvements of 17–32% and 16–28%, respectively, with significant changes. This model will have a positive impact on improving enterprise risk management capabilities and reducing financial risk costs.

Стратегічне управління ризиками на малих та середніх підприємствах в кризових умовах: концептуальна модель

This article seeks to explore the need to adapt enterprises risk management (ERM) to crisis environment, i.e., to the situation of martial law in Ukraine. To the best of the author’s knowledge, no ERM framework accounts for business operations in the situation of martial law (i.e. war environment). Organisational activities in hazardous, dynamic, and safety-oriented circumstances are researched in the area of high reliability theory. The paper presents the results of a preliminary literature review in these fields. As a result, the conceptual model "Enterprise Risk Management / High Reliability Theory" ("ERM/HRT") – which formulates the direction of the future research – was developed.

Application and comparison of three occupational health risk assessment methods in an automobile manufacturing industry

Objective: Three occupational health risk assessment methods were used to assess the occupational health risk of noise exposed posts in an automobile manufacturing enterprise. According to the results, the selection of risk assessment methods and risk management of such occupational noise enterprises were provided. Methods: Form April to November 2021, The occupational health field survey was carried out in an automobile manufacturing industry in Tianjin. The occupational health MES risk assessment method, occupational health risk index risk assessment method and Australian occupational hazard risk assessment method were used to evaluate the occupational health risk of noise-exposed posts in this enterprise, and the evaluation results of different methods were analyzed and compared. Results: The average value of L(Aeq, 8 h) in the four workshops of automobile manufacturing industry was 82.95 dB (A) , and the noise detection exceeding rate was 22.41% (26/116) . The LAeq, 8h and exceeding rate noise of welding workshop were higher than those of other workshops (χ(2)=23.56, 32.94, P<0.01) . The three occupational health risk assessment methods have the same risk assessment results for the four major workshops. The assembly and painting workshops are level 4 risk (possible risk) , and the stamping and welding workshops are level 3 risk (significant risk) . Conclusion: Occupational noise has certain potential hazards to workers in automobile manufacturing enterprises. Therefore, in the future work, corresponding organizational management measures should be taken to improve the working environment and reduce the actual exposure level of workers in order to protect the health of occupational workers.

Optimizing market risk evaluation of small and medium sized enterprises through hamacher interactive power geometric technique under uncertainty

Compared with large enterprises, the development scale and organizational structure of small and medium-sized enterprises are insufficient, which brings certain limitations to the development of small and medium-sized enterprises in China. In order to promote the long-term development of small and medium-sized enterprises in the new era, it is necessary to require enterprise leaders to innovate marketing plans, strengthen risk management of enterprises, and enhance their strength in market competition. The market risk evaluation of small and medium sized enterprises (SMSEs) in the new era is a multiple-attribute decision-making (MADM). The IVIFSs are employed as the tool for portraying uncertain information during the market risk evaluation of SMSEs in the new era. In this paper, the interval-valued intuitionistic fuzzy (IVIF) Hamacher interactive power geometric (IVIFHIPG) technique is addressed based on IVIF Hamacher interactive weighted geometric (IVIFHIWG) technique and power geometric (PG) technique. Some properties of IVIFHIPG technique were addressed. Then, the IVIFHIPG technique is employed to manage MADM under IVIFSs. Finally, an example for market risk evaluation of SMSEs in the new era is employed to verify the IVIFHIPG technique. Thus, the main contributions of this paper are addressed: (1) the IVIFHIPG technique is addressed based on IVIFHIWG technique and PG technique; (2) the IVIFHIPG technique is came up with to manage the MADM under IVIFSs; (3) a numerical example for market risk evaluation of SMSEs in the new era has been came up with to show the IVIFHIPG technique; and (4) some comparative analysis is addressed to verify the I IVIFHIPG technique.

Risk management practices and financial performance nexus: Evidence from MSMEs in Osun State, Nigeria

This study assessed the effect of enterprise risk management on the firm financial performance of Micro, Small and Medium-scale Enterprises in Osun state Nigeria. Precisely, the risk encountered, the adoption of risk management practices, the implementation of Enterprise Risk Management (ERM) practices, and the financial performance of micro, small and medium scale enterprises in Osun state Nigeria. Primary data was used for this study; a well-structured questionnaire was used to elicit data from 273 respondents. The study population consists of owners and managers of small and medium businesses in Osun state, Nigeria. Data were analyzed using descriptive analysis and was the inferential statistic used to test the hypotheses. The results showed that market (33.7%), strategic (57%), financial (46.9%), operational (34.2%), management (47.6%), and technological (45.4%) are risks prevalent to micro and small businesses, but most of the respondents disagreed that the relationship of their staff to the customer is poor. Risk acceptance with a mean score of (2.27 ± 1.21) is the most utilized risk management practice adopted by the MSMEs. The implementation of ERM practices shows that MSMEs more utilized setting of objectives (43.6%), risk identification (38.3%), risk assessment (36.2%), and control activities (31.2%) and the financial performance of the businesses was moderate (69.7%). The correlation analysis shows no significant relationship between the scale of business and the adoption of risk management practices. Also, the regression analysis shows that Risk identification (? = 0.388, p ?0.01) and Control activities (? = 1.096, p ?0.01) are the only ERM variables that significantly affect financial performance. The study concluded that the implementation of enterprise risk management practices has a significant effect on the financial performance of Micro, Small and Medium enterprises in Osun State, Nigeria.

Enterprise risk management and organizational performance: exploring mediation effects of entrepreneurial orientation

Enterprise risk management and organizational performance: exploring mediation effects of entrepreneurial orientation

Enterprise Audit Risk Assessment and Prevention based on AHP Analysis

If there are no auditing standards or auditing processes of big data, the audit risks of enterprises are increased. This paper first introduces the topic through the research background and literature review in order to ensure the integrity and accuracy of audit evidence to the maximum extent, and then analyses the causes of enterprise audit risk. When analysing the risk level of material misstatement, it is mainly the audit risk generated by the enterprise's unique business model, information system and financial management. Audit risk is mainly caused by the ability of auditors and audit process management. After quantitative analysis of the correctness of enterprise audit risk assessment indicators, this paper builds a multi-level comprehensive assessment model of enterprise audit risk on the basis of AHP analysis. At the same time, this paper puts forward specific measures to improve audit methods and audit processes and prevent audit risks in view of the actual problems encountered in the current audit risk of enterprises, so as to provide certain references for enterprise risk management and control.

Политика риск-ориентированного внутреннего аудита предприятий реального сектора экономики

In continuation of the topic of the author’s article «Relevance and practice of risk management in domestic enterprises» (Auditor, No. 4 (2022)) in this material, the author proposes the form of an internal document (standard) «Risk-oriented internal audit Policy», which can be used by enterprises of the real sector of the economy in their practical activities.

Enterprise Risk Management Practices and Financial Performance of Apparel Industry in Sri Lanka

The apparel industry plays an important role in the Sri Lankan economy. However, based on the previous literature, apparel factories continuously face many internal and external risks and business recessions that affect their performance. Therefore, the main objective of this study is to identify the impact between enterprises' risk management practices and firm’s financial performance.To achieve the said objective, researchers carried out a questionnaire-based survey of 167 managers who were involved in enterprise risk management in the apparel industry in Sri Lanka, applying a simple random sampling method. This study is quantitative research that adopts ontological and positivist research philosophy. The Statistical analysis has been done through correlation coefficient analysis with the SPSS software.Results found that small apparel factories' risk management systems turned out to be relatively weak and informal. Further, firm size and management attitude toward risk have been shown to significantly impact enterprises’ risk management practices and company financial performance. The findings confirmed a strong positive correlation between risk management practices and financial performance in the Sri Lankan apparel sector.

Discussion on the Optimization Strategies for Comprehensive Budget Management of Media Enterprises Based on Strategic Orientation

In today's rapidly developing economic and social environment, media enterprises face increasingly fierce market competition and constantly changing market environments. To stand firm and develop steadily under such a backdrop, media enterprises should correctly recognize the importance of comprehensive budget management. As an effective management tool, comprehensive budget management can help enterprises optimize resource allocation, enhance operational efficiency, and thus strengthen their competitiveness and adaptability. Comprehensive budget management based on strategic orientation is key to the sustainable development of media enterprises. Strategic orientation emphasizes that an enterprise's budget management should be closely integrated with its strategy, ensuring that the budget formulation and execution align with the long-term development goals of the enterprise. By constructing a sound comprehensive budget management system, media enterprises can ensure the scientific, rational, and operational nature of their budgets, thus providing a strong guarantee for the development of the enterprise. Moreover, strengthening internal control is an indispensable part of comprehensive budget management for media enterprises. Establishing a sound internal control mechanism allows media enterprises to standardize the budget execution process, prevent budget overruns and waste, ensure the achievement of budget goals, enhance the enterprise's risk management capability, and help the enterprise respond to various risks and challenges in a timely manner.

A QUANTITATIVE APPROACH TO ASSESSING AND MANAGING CYBERSECURITY RISKS

Effective cybersecurity risk management requires moving beyond traditional qualitative approaches toward quantitative methods that provide greater precision and objectivity. This article explores the benefits of cyber risk quantification (CRQ), which allows organizations to numerically estimate the likelihood of potential cyber threats and calculate their financial or operational impacts. By translating risks into quantifiable terms, cyber risk quantification (CRQ) provides a standardized framework to prioritize risks based on impacts, evaluate mitigation strategies through cost-benefit analysis, and align cybersecurity practices with business objectives. The quantitative, risk-based approach elevates cybersecurity as an integral part of enterprise risk management focused on protecting critical assets. Despite its analytical rigor, the quantification process leverages proven techniques to simplify risk data into clear metrics. This enables more informed decision-making by eliminating ambiguity, reducing subjective bias, and communicating risks transparently across stakeholders using a common language of risk values.