The objective of this study is to examine the determinants of Enterprise Risk Management (ERM) adoption in Malaysian Public Listed Companies (PLCs). The study focuses on ten industries from five hundred and seventy four Public Listed Companies in Malaysia for the period 2007. These ten industries include industrial products, trading/services, consumer products, properties, constructions, plantations, infrastructure projects, technology, hotels and mining. Logit regression approach will be employed, and a dummy variable equals one if companies adopt ERM and zero otherwise, is used as the dependent variable. Seven independent variables used are Size, Leverage, Profitability, International Diversification, Ownership, Chief Risk Officer and Turnover. The main results of this research is that companies with high turnover, hiring Chief Risk Officer and companies that are not diversified internationally are more likely to adopt ERM. Interestingly, Size, Leverage, Profitability, and Ownership are not significant determinants of ERM practices.

Enterprise Risk Management (ERM) has become an important subject of increasing interest among businesses and industries throughout the world. Along the same note, ERM is considered a critical management practice for companies to mitigate risks effectively. The main objective of this paper is to propose a conceptual framework for determinants of companies in Malaysia that implement ERM. From the review of various literatures available in this particular area of interest, several factors are found to be the main determinants of companies that implement ERM. Such factors are the presence of chief risk officer, leverage, profitability, international diversification, majority shareholder, size and turnover.

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