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The Moderating Effect of Risk Culture in Relationship between Leadership and Enterprise Risk Management Implementation in Malaysia

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  • Mohamad Hisyam Selamat
  • Othman Ibrahim

Abstract

The present study is designed to examine the relationship between leadership (board of directors, senior management commitment and chief risk officer) and ERM implementation amongst Malaysian public listed companies (PLC). It is also examining the moderating effect of risk culture on the relationship between leadership and ERM implementation amongst Malaysian PLC. This research adopted quantitative research approach to analyze the data obtained from the questionnaire distributed to the PLC via their Risk Management Division. From the 814 listed companies, according to Bursa Malaysia main board directory, 300 were taken as a sample. The primary data collection commenced after the pilot test was completed and the data was analyzed using SPSS Version v.18. From the analysis it is found that senior management commitment and chief risk officer have a significant and positive relationship with the ERM implementation. The hierarchical multiple regressions indicated that risk culture played the moderating role in the relationship between senior management commitment, chief risk officer and ERM implementation. This study provides significant theoretical and practical contributions for the industry, practitioners, researchers and academician, besides providing a framework for ERM implementation in the listed companies in Malaysia. The results of this study could serve as a guide to develop a strategy for audit actions in the assessment of ERM practices to further improve the level of ERM implementation by the intended shareholders as a whole.

Suggested Citation

  • Mohamad Hisyam Selamat & Othman Ibrahim, 2018. "The Moderating Effect of Risk Culture in Relationship between Leadership and Enterprise Risk Management Implementation in Malaysia," Business Management and Strategy, Macrothink Institute, vol. 9(1), pages 244-271, December.
    • Handle: RePEc:mth:bmsmti:v:9:y:2018:i:1:p:244-271
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    References listed on IDEAS

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    1. Ian H. Langford & Stavros Georgiou & Ian J. Bateman & Rosemary J. Day & R. Kerry Turner, 2000. "Public Perceptions of Health Risks from Polluted Coastal Bathing Waters: A Mixed Methodological Analysis Using Cultural Theory," Risk Analysis, John Wiley & Sons, vol. 20(5), pages 691-704, October.
    2. Anne E. Kleffner & Ryan B. Lee & Bill McGannon, 2003. "The Effect of Corporate Governance on the Use of Enterprise Risk Management: Evidence From Canada," Risk Management and Insurance Review, American Risk and Insurance Association, vol. 6(1), pages 53-73, February.
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    Cited by:

    1. Mohamed Santigie Kanu, 2021. "The Role of Risk Culture in Enterprise Risk Management Implementation," International Journal of Business and Management, Canadian Center of Science and Education, vol. 15(11), pages 1-13, July.
    2. Edais Shehab & Ahmad Puad Mat Som, 2020. "The Effect of Image and Behavioral Variables on Tourist Loyalty in Jerusalem, Palestine," International Journal of Asian Social Science, Asian Economic and Social Society, vol. 10(8), pages 396-406, August.
    3. Patrick Dahmen, 2023. "Organizational resilience as a key property of enterprise risk management in response to novel and severe crisis events," Risk Management and Insurance Review, American Risk and Insurance Association, vol. 26(2), pages 203-245, July.

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    JEL classification:

    • R00 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General - - - General
    • Z0 - Other Special Topics - - General

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