Risk Culture Is a Necessary Condition for Enterprise Risk Management to Succeed

2021 ◽  
Author(s):  
Sonjai Kumar
Keyword(s):  
Risk Management ◽  
Enterprise Risk Management ◽  
Necessary Condition ◽  
Enterprise Risk ◽  
Risk Culture

Integration Stages of Project Risk Management (PRM) into Enterprise Risk Management (ERM)

2019 ◽  
Vol 8 (1) ◽  
pp. 13-33
Author(s):  
Ruchi Agarwal ◽  
Lev Virine
Keyword(s):  
Risk Management ◽  
Functional Organization ◽  
Team Building ◽  
Integrated Approach ◽  
Enterprise Risk Management ◽  
System Thinking ◽  
Enterprise Risk ◽  
Risk Culture ◽  
The Difference ◽  
Integration Improvement

Enterprise risk management (ERM) is a relatively new concept for a project-based organization than for a functional organization. A project-based organization, in general, faces several difficulties in the implementation of ERM due to the diversity of risk associated with several projects. From a system thinking perspective, a project-based organization needs an integrated approach to interrelate the isolated processes of diverse projects. The issues are related to fuzzy picture of integration, such as, the difference between ERM and PRM processes, how to integrate the two concepts, what happens if integration process goes wrong, as well as issues with risk technologies and change in risk culture. The article provides informal and formal approaches to integration of ERM and PRM. Successful integration requires not only an understanding the value of integration, improvement in risk culture, but needs a learning-based approach to improve risk expertise, interaction, team building, and decision making.

scholarly journals The Role of Risk Culture in Enterprise Risk Management Implementation

2020 ◽  
Vol 15 (11) ◽  
pp. 13
Author(s):  
Mohamed Santigie Kanu
Keyword(s):  
Risk Management ◽  
Organizational Performance ◽  
Empirical Evidence ◽  
Business Environment ◽  
Enterprise Risk Management ◽  
Study Objective ◽  
Enterprise Risk ◽  
Risk Appetite ◽  
Study Results ◽  
Risk Culture

Enterprise Risk Management (ERM) and risk culture academics and practitioners have argued that they are inherently related without empirical evidence. They continue to advocate for their implementation by firms to face the dynamic business environment with certainty. The lack of empirical evidence to underpin this relationship partly contributes to their fragmented implementation and the lack of proper attention to risk culture in ERM implementation. The challenge in measuring these two abstract concepts contributes to their dichotomous measures in the literature, with most studies concentrated in the developed economies. The study objective is to provide a comprehensive measurement of the two constructs and empirically determine their relationship in the less-researched context of Africa. The study results empirically confirm risk culture and ERM to have a significant positive relationship. A firm's size and financial leverage were found to be significant determinants for ERM implementation, whereas capital opacity, financial slack, and board composition are not. Organizational leaders are advised by the study not to treat risk culture and ERM as substitutes but as complements. A sound risk culture provides a solid base for ERM implementation. Risk culture should be managed and developed in full alignment with the risk appetite and the ERM framework to improve organizational performance. These shall enable the promotion of a risk-aware culture and ingraining risk-related measures into performance management that help drive the organization forward. The constructs measures presented in the study can be used by academics and risk practitioners to determine the level of risk culture and ERM implementation in organizations.

Innovative Approaches to Building Enterprise Risk Management in Emerging Economies

2021 ◽  
pp. 133-154
Author(s):  
Ilse Patricia Lopez de la Cruz ◽  
Alasdair James Marshall ◽  
Udechukwu Ojiako ◽  
Serkan Ceylan ◽  
Fenfang Lin
Keyword(s):  
Risk Assessment ◽  
Risk Management ◽  
Emerging Economies ◽  
Management Practices ◽  
Enterprise Risk Management ◽  
Assessment Practice ◽  
Enterprise Risk ◽  
Assessment Techniques ◽  
Risk Culture ◽  
Building Enterprise

This chapter explores a very positive example of enterprise risk management (ERM) development in Mexico, set by the firm Grupo Proeza, from which valuable and highly generalisable lessons can be learned. These lessons will pertain most centrally to Grupo Proeza's techniques of ERM building, where risk management practices are used to enhance the cultural and other foundations for ERM. Of particular interest is the notion that various risk assessment techniques can be used for this purpose, which may seem counter-intuitive by reversing the formative relationship between risk culture and risk assessment practice that is more typically the focus for attention.

scholarly journals Enterprise Risk Management and Risk Culture in Construction Public Listed Companies

2021 ◽  
Vol 26 (2) ◽  
pp. 17-36
Author(s):  
Ching Ching Wong ◽  
Faizul Azli Mohd Rahim ◽  
Siaw Chuing Loo
Keyword(s):  
Risk Management ◽  
Listed Companies ◽  
Two Dimensions ◽  
Enterprise Risk Management ◽  
Annual Reports ◽  
Top Management ◽  
Risk Manager ◽  
Enterprise Risk ◽  
Risk Appetite ◽  
Risk Culture

Inadequate risk management and lack of risk culture can expose a company to unexpected risk events, which can negatively affect its performance. However, there are inconsistencies in suitable dimensions to measure the enterprise risk management (ERM) construct, as well as insufficient embedding strategies for risk culture. This study aims to identify the ERM practices and risk culture dimensions among the Malaysian construction public listed companies (PLCs). The roles of top management and chief risk officer/risk manager in influencing ERM and risk culture are also explored. A total of 46 annual reports and 10 interviews of industry practitioners were analysed using content analysis. The analysis of the annual reports found that risk policy and risk appetite/tolerance, monitoring key risk and accountability are the three dimensions of risk culture. In addition, based on the interviews, reward and recognition and internal relationships were identified as the two dimensions of risk. Top management and risk manager were found to be the primary drivers of ERM programme and risk culture in construction PLCs. The results of this study are used to formulate a survey instrument for the subsequent data collection to test the proposed theoretical model.

scholarly journals Towards Managing Firm Performance through Enterprise Risk Management Practices and Staff Competence: An Empirical Study from the Banking Sector

2021 ◽  
Vol 3 (3) ◽  
pp. 32-45
Author(s):  
Habil Slade Ogalo
Keyword(s):  
Risk Management ◽  
Firm Performance ◽  
Knowledge Sharing ◽  
Management Practices ◽  
Banking Sector ◽  
Enterprise Risk Management ◽  
Enterprise Risk ◽  
Risk Culture ◽  
The Relationship ◽  
Risk Knowledge

This study was aimed to measure the impact of enterprise risk management practices on firm performance following the moderation of staff competence. The present study proposed five hypotheses, three direct and two moderating. For measuring hypotheses and objectives, the current research targeted bank officers in the Kingdom of Bahrain's banking sector. A total final sample of 349 was used in primary analyses selected through simple random sampling. Current research shows significant positive effects of risk culture and risk knowledge sharing on the firm`s (financial and non-financial) performance of banks in the Kingdom of Bahrain. Similarly, the first moderation strengthens the relationship between risk knowledge sharing and firm performance through staff competence. In addition, the second moderation hypothesis does not strengthen the relationship between risk culture and firm performance with the moderating effect of staff competence. The current research findings are supported under the resource-based view with several theoretical and practical implications for researchers and industry practitioners.

scholarly journals A Theoretical Framework for Enterprise Risk Management and Organizational Performance

2021 ◽  
Vol 14 (5) ◽  
pp. 63
Author(s):  
Mohamed Santigie Kanu
Keyword(s):  
Risk Management ◽  
Strategic Planning ◽  
Organizational Performance ◽  
Business Environment ◽  
Enterprise Risk Management ◽  
Empirical Literature ◽  
Equation Modeling ◽  
Academic Literature ◽  
Enterprise Risk ◽  
Risk Culture

The implementation of holistic risk management, enterprise risk management (ERM), is believed to contribute significantly to the successful performance of modern-day organizations that operate in an increasingly volatile and dynamic environment. In an environment of scarce resources and information uncertainty, ERM, risk culture, and strategic planning is required to face an unstable business environment to achieve organizational goals. Several conceptual and empirical studies have provided mixed evidence on the value relevance of ERM. Scholars have also demonstrated that the effects of ERM on performance are contingent upon certain contextual variables. Currently, the academic literature is silent on the joint relationship of ERM, risk culture, strategic planning, and organizational performance. The purpose of this study is to uncover this research gap by analytically reviewing pertinent conceptual and empirical literature to establish the possibility that the impact of ERM on organizational performance is transmitted through risk culture and strategic planning. This paper advances these evolving suggestions, which hinges on the conclusion that the direct effect of ERM on organizational performance is debatable and hence inconclusive due to the possible mediating influence of risk culture and strategic planning. A framework is conceptualized to examine the mediating effects of these two constructs on the relationship. The study proposes partial least squares structural equation modeling for statistical analysis using the unexplored multiple mediation analysis in the ERM academic literature. This paper’s postulations would guide empirical research in various contexts to address the knowledge gaps in the extant literature.

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