Re-thinking: Risk Governance?

Rahim, Siti Rohaya Mat; Mahat, Fauziah; Nassir, Annuar; Yahya, Mohamed Hisham

doi:10.1016/s2212-5671(15)01157-0

Cited by 6 publications

(6 citation statements)

References 22 publications

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“…The positive relationship between ERM_index and financial performance suggests that effective implementation of ERM framework has the capacity to increase firm performance and invariably enhance shareholders' value. This finding is consistent with the studies of Liebenberg 2011 andRahim et al (2015). These studies documented that the risk governance process improves financial performance, and reduces the threats of emerging risks.…”

Section: Discussionsupporting

confidence: 92%

Risk Governance and Financial Performance: An Empirical Analysis

Erin

Bamigboye

Arumona

2020

Business: Theory and Practice

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This study examines the influence of risk governance on financial performance of 50 quoted firms in the Nigerian financial sector for the period of five years (2013–2017). Panel data was used to examine how the risk governance variables (Enterprise Risk Management_index, Chief Risk Officer_presence, Board Risk Committee_size, Board Risk Committee_activism, and Board Risk Committee_independence) affects financial performance (Return on Asset). The study reveals empirically that most of the risk governance variables (ERM_index, CRO_presence, BRC_activism, and BRC_independence) have a significant and positive impact on the performance of the firm with the exception of BRC_size which shows a negative association with the financial performance of the studied firms. The study empirically reveals that strong Chief Risk Officer (CRO) presence, effective board risk committee, and inclusion of independent directors in the risk committee will go far in serving as factors that would improve the performance of firms in today’s financial environment. This study made a lot of core findings that contribute to the emerging literatures on risk governance and risk management research.

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Section: Discussionsupporting

confidence: 92%

Risk Governance and Financial Performance: An Empirical Analysis

Erin

Bamigboye

Arumona

2020

Business: Theory and Practice

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“…The result agrees with the prediction of the agency theory that a board provides monitoring mechanisms for company management, thereby increasing shareholders' value. This result conforms to the results of Paletta (2014) and Rahim et al (2015). However, the study contradicts the studies of Gherghina (2015) and Ali and Ayoko (2020), which reported that board size had no significant association with firm value.…”

Section: Discussionsupporting

confidence: 86%

“…However, studies have produced conflicting results on what number represents an effective and efficient board. For example, during the 2014 cross-sectional analysis, Mat Rahim, Mahat, et al (2015) examined the size of the board and the performance of 200 selected Islamic banks across 21 countries and the results revealed a significant association between board size and the performance of the Islamic banks. According to study conducted by Isik and Ince (2016), board size of Turkish banks has strong positive relationship with their performance.…”

Section: Prior Literatures and Propositionsmentioning

confidence: 99%

Corporate governance and equity value: empirical evidence from Nigerian firms

Shittu,

Che-Ahmad

2023

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Purpose The purpose of this study is to examine the impact of selected corporate governance (CG) variables on the equity value multiple (EVM) of listed firms in Nigeria. Design/methodology/approach The research used data obtained from 100 firms listed on the Nigerian Stock Exchange (NSE) from 2014 to 2018. A generalized method of moment was used to estimate the relationship, whereas principal component analysis was used to generate composite values of EVMs. Findings Findings reveal a significant association between board size, board independence, board gender diversity, managerial shareholding, audit committee independence, disclosure of CG information and EVM at a 1% level of significance. Research limitations/implications This study was limited to firms that disclosed information on CG and EVMs. Practical implications These empirical findings lend support to agency theory, which suggests the use of various CG variables as a way of reducing principal-agent conflicts. It also lends support to resource dependency theory from a gender diversity perspective. Originality/value The study is a pioneering effort toward unlocking the relationship between some CG variables and the EVMs, focusing on firms listed on the NSE.

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“…The measurement model examines the validity of constructs through some tests, namely, the single-factor congeneric (SFC) and confirmatory factor analysis (CFA) (Rahim et al , 2015; Ghofar and Islam, 2015). This measurement model can be divided into two different models, reflective and formative.…”

Section: Methodsmentioning

confidence: 99%

“…The formative model nevertheless suffers from the lack of internal validity and consistency (Ghofar and Islam, 2015). Following the studies of Ghofar and Islam (2015), Rahim et al (2015); Mohd Sofian and Muhamad (2020); and Shamsudheen and Chowdhury (2020), which used the reflective model, this study uses the reflective measurement model in measuring the study constructs.…”

Section: Methodsmentioning

confidence: 99%

Validity of zakat ratios as Islamic performance indicators in Islamic banking: a congeneric model and confirmatory factor analysis

Nomran

Haron

2021

IJIF

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Purpose There is much debate in the literature about how the performance of Islamic banks (IBs) should be measured. Basically, IBs’ business models are different from that of conventional banks; thus, the performance of IBs should be measured by using a Sharīʿah-based approach. This paper considers zakat (Islamic tax) as an alternative indicator to measure the performance of IBs. This paper aims to examine whether zakat ratios can be used as Islamic performance (ISPER) indicators for IBs besides the conventional performance (COPER) indicators. Design/methodology/approach The investigation covered a sample of 214 yearly observations of 37 IBs located in Indonesia, Malaysia, Bahrain, Saudi Arabia and the United Arab Emirates for the period 2007–2015. This study used a single-factor congeneric model and confirmatory factor analysis, performed using the AMOS 23.0 software. Findings The findings assert that the discriminant validity of multi-bank performance, as measured by ISPER [zakat on assets (ZOA) and zakat on equity (ZOE)] and COPER indicators (return on assets, return on equity and operational efficiency in terms of assets), is very high. Hence, ISPER and COPER measurements are valid, either together to measure the multi-performance of IBs from both the Islamic and conventional perspectives, or independently as each measurement is valid to measure the Islamic and conventional performance if it is used separately. Research limitations/implications This paper does not investigate whether the findings are constant across time. This represents one of the limitations of this study. Practical implications It is strongly recommended that IBs calculate and disclose zakat ratios, particularly ZOA and ZOE, in their annual reports. Researchers and academicians should use these ratios for measuring the ISPER of IBs, either along with COPER or separately. Originality/value Empirical evidence is provided in this paper on the development and validity of zakat ratios as ISPER indicators in the Islamic banking industry. Zakat ratios are suitable indicators that can measure IBs’ performance and achieve the goals of IBs as well as those of Islamic economics. Technically, zakat has a dynamic ability to reflect the profitability of IBs. The more the IBs generate profit, the more they pay zakat. Furthermore, the greater the total assets of IBs, the higher the amount of zakat that they should pay. Thus, zakat ratios can be used as profitability measurements as in the case of tax ratios.

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Re-thinking: Risk Governance?

Cited by 6 publications

References 22 publications

Risk Governance and Financial Performance: An Empirical Analysis

Risk Governance and Financial Performance: An Empirical Analysis

Corporate governance and equity value: empirical evidence from Nigerian firms

Validity of zakat ratios as Islamic performance indicators in Islamic banking: a congeneric model and confirmatory factor analysis

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