Is enterprise risk management a value added activity?

Marc, Mojca; Sprčić, Danijela Miloš; Žagar, Marina Mešin

doi:10.15240/tul/001/2018-1-005

Cited by 16 publications

(12 citation statements)

References 24 publications

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“…ERM should improve corporate sustainability and lower a company's overall risk of failure, making positions for other stakeholders more secure and valuable. (Marc et al, 2018). Furthermore, ERM is claimed as an integrated way of measuring, understanding and controlling risks facing a firm.…”

Section: Literature Review Development Of Risk Management Practicesmentioning

confidence: 99%

“…This technique is more efficient and value maximizing than dealing with each risk independently as in silo-approach (McShane et al, 2011). Furthermore, Marc et al (2018) propose that ERM should improve corporate sustainability and lower a company's overall risk of failure to enhance shareholders value. In ERM, the focus is shifted towards a more offensive handling by integrating ERM into the corporate strategy and the decision process and is explicitly intended to contribute to increasing shareholder value (Gatzert & Martin, 2015).…”

Section: Risk Management Theorymentioning

confidence: 99%

“…In the light of the financial crisis, there is a need for appropriate risk management, planning, and control where organizations need to reassess their governance structure to ensure adequate risk management is in place. This crisis has demonstrated weaknesses in traditional risk management styles and has proven the failure of the traditional silo-based risk management to transmit information about risk exposures to management (Marc, Sprčić, & Žagar, 2018). Therefore, organizations need to transform their risk management technique from silo-based approach to holistic approach.…”

Section: Introductionmentioning

confidence: 99%

See 2 more Smart Citations

Value Creation of Enterprise Risk Management: Evidence from Malaysian Shariah-Compliant Firms

Maruhun¹,

Atan²,

Yusuf³

et al. 2021

IJARBSS

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Section: Literature Review Development Of Risk Management Practicesmentioning

confidence: 99%

Section: Risk Management Theorymentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

See 1 more Smart Citation

Value Creation of Enterprise Risk Management: Evidence from Malaysian Shariah-Compliant Firms

Maruhun¹,

Atan²,

Yusuf³

et al. 2021

IJARBSS

View full text Add to dashboard Cite

“…However, the identification and potential effects of risk events on corporate financial performance have not been dealt with. This is attributed to the complexity of this task (Salameh & Bashir, 2013;Bunget et al, 2014), which arises from the fact that business sustainability is assessed not only in terms of efficient use of resources and procedures (operational efficiency is reflected in corporate financial performance, see Marc et al, 2018) and in the growth of share value (Guenster et al, 2011;Cai & He, 2014), but also that the firm's performance is also assessed in relation to the quality of business environment (Džunić & Golubović, 2018), often with positive impacts of CSR (Manzoor et al, 2019) and environmental protection practices (Flammer, 2013;Fuente et al, 2016;Chen et al, 2017;Kumar et al, 2017;Myskova & Hajek, 2018).…”

Section: Related Literaturementioning

confidence: 99%

Mining Risk-Related Sentiment in Corporate Annual Reports and Its Effect on Financial Performance

Myšková

Hájek

2020

Technological and Economic Development of Economy

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Models that predict corporate financial risk are important early-warning systems for corporate stakeholders. Most models to date have been developed using financial indicators. However, in financial decision-making, increasing attention is being paid to the role of textual information, which may provide additional insight into managerial opinions and intentions and which has recently been used to more effectively predict corporate financial performance. Previous approaches in this regard have predominantly focused on sentiment analysis of managerial communication. However, the role of context-related sentiment remains poorly understood in the financial risk domain. Here, we investigate how risk-related sentiment in verbal managerial communication might predict corporate financial performance, including indebtedness, profitability, market value and bankruptcy risk. To ensure deductive content validity, we propose specific word lists for each type of corporate financial risk and assign each word with positive / negative labels. Our findings provide evidence for a major role of risk-related sentiment as an indicator of corporate performance in terms of financial risks. Notably, using novel risk-related word lists in regression models, we show that a proactive and opportunity-seeking risk management has a significantly positive impact on financial performance, implying that stakeholders should carefully consider the risk-related managerial communication in corporate annual reports.

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“…ERM encompasses activities and strategies that allow the company to identify, measure, reduce or systematically exploit, control and monitor exposure to various types of corporate risks. When considering the interactive effects of different risk events, the ERM offers a balance between the dual nature of risk, ensuring effective protection against threats and leverage opportunities (Marc, Sprcic, & Žagar, 2018).…”

Section: Enterprise Risk Management In Colombiamentioning

confidence: 99%

The Importance of Enterprise Risk Management in Large Companies in Colombia

Blanco‐Mesa

Rivera-Rubiano

Patiño-Hernandez

et al. 2019

Technological and Economic Development of Economy

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The main aim of this paper is to establish that essential aspects are determinant in the enterprise risk identification (ERI) and the existing interrelationship between each corporate risk goals, in the large companies of Colombia. Study proposes a parametric analysis and a non-parametric. The first uses correlation matrices for statistical analysis, a multiple linear regression statistical tools to identify that essential aspects are determinant in the (ERI). The second proposes a new aggregation called the Bonferroni Induced Ordered Weighted Average Adequacy Coefficient (BON-IHOWAAC) operator and Bonferroni Induced Ordered Weighted Average the Maximum and Minimum level (BON-IHOWAIMAM) to establish the existing interrelationship between each corporate risk goals using the risk management information and manager perception. Of the results obtained is highlighted that for all economic sectors; first, control measures are highlighted in the (ERI) and second, the goal with the greatest interrelationship for the other ones to be achieved is protect people. Finally, the study concludes with a holistic analysis of the importance that executive team gives to the management of risks from the prioritization of objectives and the use of tools for the treatment of information to improve the process of decisions-making in uncertain contexts.

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Is enterprise risk management a value added activity?

Abstract: IS ENTERPRISE RISK MANAGEMENT A VALUE ADDED ACTIVITY? Mojca Marc, Danijela Miloš Sprčić, Marina Mešin ŽagarEnterprise risk management (ERM)

Cited by 16 publications

References 24 publications

Value Creation of Enterprise Risk Management: Evidence from Malaysian Shariah-Compliant Firms

Value Creation of Enterprise Risk Management: Evidence from Malaysian Shariah-Compliant Firms

Mining Risk-Related Sentiment in Corporate Annual Reports and Its Effect on Financial Performance

The Importance of Enterprise Risk Management in Large Companies in Colombia

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