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Risk governance and firm value: exploring the hierarchical regression method

Author

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  • Olayinka Erin
  • Foluso Aribaba

Abstract

This study examines the impact of risk governance on firm value of 50 listed firms in the Nigerian financial institutions for the period of five years (2013-2017). The study provides empirical evidence which shows that risk governance variables (enterprise risk management index, chief risk officer presence, board risk committee size, board risk committee activism, and board risk committee independence) have a positive and significant impact on firm value. Similarly, firm attribute variables (firm size and firm age) have a significant positive impact on firm value while on the contrary corporate governance variables (board size and board of directors independence) show a negative but a significant impact on firm value. The empirical evidence observed in this study reveals that the institutionalisation of risk culture, strong risk oversight functions and increase in risk accountability by the board have greater tendency to enhance the value of a firm. This study contributes to the growing literature in the area of corporate reporting, risk governance and risk management research in Africa.

Suggested Citation

  • Olayinka Erin & Foluso Aribaba, 2021. "Risk governance and firm value: exploring the hierarchical regression method," Afro-Asian Journal of Finance and Accounting, Inderscience Enterprises Ltd, vol. 11(1), pages 104-130.
    • Handle: RePEc:ids:afasfa:v:11:y:2021:i:1:p:104-130
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