ICGN Corporate Risk Oversight Guidelines: The Role of the Board and Institutional Shareholders

2011 ◽  
Author(s):  
Erik Breen ◽  
Andrew Mark Clearfield ◽  
Karol Marek Klimczak
Keyword(s):  
Institutional Shareholders ◽  
Corporate Risk ◽  
Risk Oversight

Does corporate governance influence corporate risk-taking? Evidence from the Institutional Shareholders Services (ISS)

2015 ◽  
Vol 13 ◽  
pp. 105-112 ◽  
Author(s):  
Pornsit Jiraporn ◽  
Pattanaporn Chatjuthamard ◽  
Shenghui Tong ◽  
Young Sang Kim
Keyword(s):  
Corporate Governance ◽  
Risk Taking ◽  
Institutional Shareholders ◽  
Corporate Risk

scholarly journals CORPORATE RISK DISCLOSURE: THE EFFECT OF CORPORATE GOVERNANCE

2021 ◽  
Vol 5 (1) ◽  
pp. 101-113
Author(s):  
Arisona Ahmad ◽  
Muhammad Muhammad ◽  
Dwi Narullia
Keyword(s):  
Risk Management ◽  
Corporate Governance ◽  
Stock Exchange ◽  
Company Size ◽  
Business Risk ◽  
Risk Disclosure ◽  
Initial Hypothesis ◽  
Corporate Risk ◽  
Corporate Business

ABSTRACT This research investigates the role of corporate governance on the disclosure of corporate business risk management with leverage and company size as control variables. Research data were taken from a company that classified as LQ 45 on the Indonesian stock exchange from 2015 to 2018. This research finds that disclosure of business risk management as a sign that management has managed the company with the good attitude increases along with increased corporate governance activities. Leverage and company size also affect company policies regarding the disclosure of corporate business risks. Overall, the results of this study are consistent with the assumption that corporate governance affects company policies regarding business risk disclosure. However, in contrast to the initial hypothesis, the composition of the board commissioners reduces the risk management disclosure activity in the company. This is because the board of commissioners considers that business risk disclosure can increase costs and reduce its competitive advantage so that investors will respond negatively. Apart from these variables, this study contributes to agency theory, where the findings of this study indicate the confirmation of the application of theory in the context of this study. ABSTRAK Penelitian ini menyelidiki peran tata kelola perusahaan terhadap pengungkapan manajemen risiko bisnis perusahaan dengan leverage dan size perusahaan sebagai variable control. Data penelitian meliputi perusahaan yang tergolong LQ 45 di bursa efek Indonesia dari tahun 2015 hingga 2018. Penelitian ini menemukan bahwa pengungkapan manajemen risiko bisnis sebagai tanda bahwa manajemen telah berperilaku baik dalam mengelola perusahaan meningkat seiring dengan peningkatan aktivitas tata Kelola perusahaan. Leverage dan ukuran perusahaan juga mempengaruhi kebijakan perusahaan mengenai pengungkapan risiko bisnis perusahaan. Secara keseluruhan, hasil penelitian ini konsisten dengan dugaan bahwa tata kelola perusahaan mempengaruhi kebijakan perusahaan mengenai pengungkapan risiko bisnis. Namun, berbeda dengan hipotesis awal komposisi dewan komisaris menurunkan aktivitas pengungkapan manajemen risiko diperusahaan. Hal ini dikarenakan dewan komisaris menimbang bahwa pengungkapan risiko bisnis dapat meningkatkan biaya serta menurunkan keunggulan kompetitif perusahaan sehingga akan direspon negatif oleh investor. Selain variabel tersebut, penelitian ini berkontribusi pada teori agensi dimana temuan yang ada menunjukkan konfirmasi dari penerapan teori di dalam konteks penelitian.

Which formula for corporate risk-taking around the world? Exploring happiness as the “black box”

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Thao Phuong Tran ◽  
Anh-Tuan Le
Keyword(s):  
Risk Taking ◽  
Negative Influence ◽  
Current Debate ◽  
Alternative Measure ◽  
Firm Risk ◽  
Content Type ◽  
Financial Decisions ◽  
The World ◽  
Corporate Risk

PurposeThis paper examines how the degree of happiness affects corporate risk-taking and the moderating influence of family ownership of firms on this relationship.Design/methodology/approachThe authors use an international sample of 17,654 firm-year observations from 24 countries around the world from 2008 to 2016.FindingsUsing the happiness index from the World Happiness Report developed by the United Nations Sustainable Development Solutions Network, the authors show that a country's overall happiness is negatively correlated with risk-taking behavior by firms. The findings are robust to an alternative measure of risk-taking by firms. Further analyses document that the negative influence of happiness on firm risk-taking is more pronounced for family-owned firms.Practical implicationsThe paper is consistent with the notion that happier people are likely to be more risk-averse in making financial decisions, which, in turn, reduces corporate risk-taking.Originality/valueThis study contributes to the broad literature on the determinants of corporate risk-taking and the growing literature on the role of sentiment on investment decisions. The authors contribute to the current debate about family-owned firms by demonstrating that the presence of family trust strengthens the negative influence of happiness on corporate risk-taking, a topic that has been unexplored in previous studies.

Kennzeichnung, Erfassung und Steuerung von Risikokultur

2021 ◽  
Author(s):  
Franziska Grieser
Keyword(s):  
Middle Management ◽  
Control Mechanisms ◽  
Structured Interviews ◽  
Ownership Structures ◽  
Risk Culture ◽  
Definition Of ◽  
Constituent Elements ◽  
Corporate Risk ◽  
Targeted Approach

Events such as the financial crisis in 2008/09 and the Volkswagen scandal about diesel engines in 2015 show that the existence of a risk management system does not sufficiently protect companies from risks. An inadequate corporate risk culture is often used to explain the causes of such crises. The aim of this study is to create access to a more targeted approach to risk culture. This is achieved through a methodical combination of conceptual developments and semi-structured interviews with companies from different industries and ownership structures. To start with, the author develops a definition of risk culture, identifies its constituent elements and derives a risk culture framework from these elements. In doing so, she identifies both ways of assessing risk culture and risk culture control mechanisms. Among other things, her findings point to the central role of top and middle management in this regard and reveal a variety of risk culture control mechanisms.

Transparency Regulation in Financial Markets – Moving into the Surveillance Age?

2011 ◽  
Vol 2 (3) ◽  
pp. 305-321
Author(s):  
Iris H-Y Chiu
Keyword(s):  
Financial Crisis ◽  
Financial Markets ◽  
Financial Regulation ◽  
Global Financial Crisis ◽  
Financial Sector ◽  
Regulatory Control ◽  
Legal Reforms ◽  
The Global Financial Crisis ◽  
Risk Oversight

In the wake of the global financial crisis, the trajectory of legal reforms is likely to turn towards more transparency regulation. This article argues that transparency regulation will take on a new role of surveillance as intelligence and data mining expand in the wholesale financial sector, supporting the creation of designated systemic risk oversight regulators.The role of market discipline, which has been acknowledged to be weak leading up to the financial crisis, is likely to be eclipsed by a more technocratic governance in the financial sector. In this article, however, concerns are raised about the expansion of technocratic surveillance and whether financial sector participants would internalise the discipline of regulatory control. Certain endemic features of the financial sector will pose challenges for financial regulation even in the surveillance age.

Taxes and risk-taking behavior: evidence from mergers and acquisitions in the G7 nations

2018 ◽  
Vol 19 (3) ◽  
pp. 277-294
Author(s):  
Poonyawat Sreesing
Keyword(s):  
Mergers And Acquisitions ◽  
Option Pricing ◽  
Risk Taking ◽  
Investment Decisions ◽  
Tax Rates ◽  
Content Type ◽  
Asset Risk ◽  
Tax Effects ◽  
Corporate Risk

PurposeThis study aims to examine how corporate taxes affect corporate risk-taking decisions.Design/methodology/approachThis study examines corporate risk-taking by analyzing how a firm’s asset risk changes following an acquisition carried out by publicly listed companies in the G7 nations. To measure the asset risk of a firm, this study uses the option pricing framework in Merton (1974).FindingsConsistent with an implication of the Merton (1974) framework, the findings show that firms take more risk in their investment decisions when tax rates are high. Moreover, the tax effects wane for firms with a relatively large borrowing opportunity and this suggests that the risk-taking incentive from taxes is moderated by the reputation concern in the debt market, lending support to the Diamond (1989) reputation-building model. The empirical results also show that the tax-induced risk-taking incentive is restrained by creditor rights. Overall, the study reveals an important role of taxes in the structure of corporate investment decisions.Practical implicationsThe implications of this study can be beneficial to policymakers when considering the alteration of tax rates, as it will affect the riskiness of firm investment decisions.Originality/valueThis study provides a better understanding of the role of taxes on risk-taking and also contributes to the growing body of evidence supporting tax effects of risk-taking. The relationship between taxes and risk-taking has proven that the corporate taxation is one of the key factors that firms consider during their selection of risky investments. Unlike previous studies, this research is the first to investigate the change in asset risk, estimating by the option pricing framework, through studying a particular event: mergers and acquisitions.

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