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

Author

Listed:
  • Masculine Muhammad Muqorobin
  • Utpala Rani
  • Alex Johanes Simamora

Abstract

Purpose - This research aims to examine the moderating role of the existence of risk management committee between risk-taking behavior and companies’ performance. Design/methodology/approach - Research 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. Findings - The 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/value - This 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.

Suggested Citation

  • Masculine Muhammad Muqorobin & Utpala Rani & Alex Johanes Simamora, 2023. "The role of risk management committee between risk-taking behavior and companies’ performance," International Journal of Productivity and Performance Management, Emerald Group Publishing Limited, vol. 73(3), pages 817-836, April.
    • Handle: RePEc:eme:ijppmp:ijppm-07-2022-0347
    DOI: 10.1108/IJPPM-07-2022-0347
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