R<scp>ISK</scp> G<scp>OVERNANCE</scp><scp>IN</scp><scp>THE</scp> I<scp>NSURANCE</scp> S<scp>ECTOR</scp>—D<scp>ETERMINANTS</scp><scp>AND</scp> C<scp>ONSEQUENCES</scp><scp>IN</scp><scp>AN</scp> I<scp>NTERNATIONAL</scp> S<scp>AMPLE</scp>

Magee, Shane; Schilling, Cornelia; Sheedy, Elizabeth

doi:10.1111/jori.12218

Cited by 28 publications

(2 citation statements)

References 40 publications

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“…Ellul and Yerramilli's (2013) risk management index incorporates not just measures of CRO status but also indicators of board risk committee effectiveness, confirming the relevance of effective governance for improved US bank performance during the crisis. Magee et al (2019) established similar findings supporting similar governance structures in an international sample of insurance companies. Not only did they deliver superior crisis outcomes, but also an advantage in the post-crisis years.…”

Section: Related Literaturesupporting

confidence: 75%

Does executive accountability enhance risk management and risk culture?

Sheedy

Canestrari-Soh

2023

Accounting & Finance

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We evaluate a novel regulation designed to address ongoing risk management failures: Australia's Banking Executive Accountability Regime (BEAR). This mixed methods study draws on a survey and 41 interviews with accountable persons and their reports across 15 organisations. Consistent with theory and previous experimental research, the study demonstrates the benefits of enhanced accountability for promoting more diligent ‘system 2’ behaviour. We provide evidence that BEAR promotes greater felt accountability among senior executives which in turn stimulates more proactive and diligent risk management behaviour. This behaviour has the potential to attenuate many of the behavioural biases associated with risk management failures.

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Section: Related Literaturesupporting

confidence: 75%

Does executive accountability enhance risk management and risk culture?

Sheedy

Canestrari-Soh

2023

Accounting & Finance

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“…The study is related to the literature examining the role of directors and senior executives in risk management. Several studies have now demonstrated the favourable outcomes associated with risk governance in financial institutions (Ellul and Yerramilli, 2013;Aebi et al, 2012;Magee et al, 2017). Related to this is a literature on board diversity that sheds light on the characteristics of directors in relation to risk-taking (Berger et al, 2014;Adams and Ragunathan, 2015;Sila et al, 2016).…”

Section: Introductionmentioning

confidence: 97%

Risk management behaviour in banking

Sheedy

Lubojanski

2018

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Purpose Risk management is now considered the responsibility of all financial services professionals, not just senior leaders or risk specialists. Very little is known about the role of staff in risk management, so the purpose of this paper is to, first, clarify what constitutes “desirable” risk management behaviour by financial services staff based on the practitioner and regulatory literature. Based on this understanding, the authors analyse the characteristics of those who are most likely to display such behaviour. Design/methodology/approach The paper analyses some 36,000 survey responses across ten banks headquartered in Anglo countries. Findings Desirable risk management behaviour at the employee level includes compliance but goes well beyond mere compliance to include speaking up, thoughtful engagement with and accountability for the risk management framework. The authors find a significant negative association between individual risk tolerance and desirable risk management behaviour. Older workers as well as those with greater seniority are more likely to report desirable risk management behaviour. The link between female gender and risk management behaviour is not supported after controlling for individual risk attitudes. The authors provide evidence that females who succeed in financial services do not conform to traditional female stereotypes. Practical implications Findings suggest financial institutions should hire/retain more older workers and those with lower risk tolerance to improve risk management. Hiring more females, however, is not likely to lead to better risk management. Originality/value The paper is the first to investigate risk management behaviour in financial services staff. The research exploits a unique, difficult to obtain data set.

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Quality of financial reporting in the Indian insurance industry: Does corporate governance matter?

Goyal,

Gulati

2024

J Corp Accounting Finance

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This study explores the relationship between financial reporting quality and insurer governance, with the hypothesis that robust governance procedures exert better control over managers’ opportunistic behavior. The analysis is based on a dataset of insurer firms from 2014 to 2021. The econometric results obtained using the two‐step system GMM technique reveal that the overarching influence of corporate governance on enhancing financial reporting quality is evident, with board and risk governance matters the most. Among individual governance attributes, the optimal board size, a higher proportion of independent directors, audit and risk committees’ size, and risk committee independence play a significant role in governing discretionary accruals. The efficacy of governance mechanisms considerably differs across life and non‐life insurers, shedding light on the nuanced dynamics within the Indian insurance market. The results lend empirical support to resource dependency and agency theories within the Indian insurance sector. The implications suggest potential avenues for amending or redesigning governance norms with specificities of insurers and the ultimate goal of fostering an environment conducive to enhancing the reporting quality of Indian insurance firms.

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RISK GOVERNANCEINTHE INSURANCE SECTOR—DETERMINANTSAND CONSEQUENCESINAN INTERNATIONAL SAMPLE

Cited by 28 publications

References 40 publications

Does executive accountability enhance risk management and risk culture?

Does executive accountability enhance risk management and risk culture?

Risk management behaviour in banking

Quality of financial reporting in the Indian insurance industry: Does corporate governance matter?

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