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Effects of Corporate Governance Structures on Enterprise Risk Management Practices in Malaysia

Author

Listed:
  • Zuraidah Mohd-Sanusi

    (Accounting Research Institute, Universiti Teknologi MARA, Malaysia,)

  • Shayan Motjaba-Nia

    (Accounting Research Institute, Universiti Teknologi MARA, Malaysia,)

  • Nurul A. Roosle

    (Department of Accounting, Kolej Matrikulasi Melaka, Malaysia,)

  • Ria N. Sari

    (Department of Accounting, Faculty of Economics, Universitas Riau, Indonesia)

  • Agus Harjitok

    (Department of Management, Faculty of Economics, Universitas Islam Indonesia, Indonesia.)

Abstract

The risk management requirement, as part of best corporate governance practices has become compulsory for the public listed companies (PLCs) in Malaysia. This study examines on the existing governance structures including establishment of Risk Management Committee (RMC), board independence, auditor quality and institutional ownerships would influence the extent of enterprise risk management (ERM) practices. The study derived the aggregate ERM scores in measuring the relevant control and risk management practices of PLCs. For the purpose of the study, governance structure is proxied by RMC, board independence, auditor quality and institutional ownerships. Using a sample of large companies, data were regressed using regression analysis, based on three regression models. The study found that the establishment of RMC provided greater awareness of ERM within particular organization. However, the other governance variables have made less contribution to the risk management awareness and practices within a particular organization.

Suggested Citation

  • Zuraidah Mohd-Sanusi & Shayan Motjaba-Nia & Nurul A. Roosle & Ria N. Sari & Agus Harjitok, 2017. "Effects of Corporate Governance Structures on Enterprise Risk Management Practices in Malaysia," International Journal of Economics and Financial Issues, Econjournals, vol. 7(1), pages 6-13.
    • Handle: RePEc:eco:journ1:2017-01-02
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    References listed on IDEAS

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    Cited by:

    1. Ben Kajwang, 2022. "Theoretical review of enterprise risk management culture drivers for insurance firms in Kenya," International Journal of Research in Business and Social Science (2147-4478), Center for the Strategic Studies in Business and Finance, vol. 11(5), pages 210-217, July.

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    More about this item

    Keywords

    Enterprise Risk Management; Corporate Governance; Bursa Listing Requirement; Monitoring Mechanism; Risk Management Committee;
    All these keywords.

    JEL classification:

    • G3 - Financial Economics - - Corporate Finance and Governance
    • G31 - Financial Economics - - Corporate Finance and Governance - - - Capital Budgeting; Fixed Investment and Inventory Studies

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