The role of risk management committee between risk-taking behavior and companies’ performance

Abstract

PurposeThis research aims to examine the moderating role of the existence of risk management committee between risk-taking behavior and companies’ performance.Design/methodology/approachResearch sample includes 383 manufacturing company-year that listed on the Indonesian Stock Exchange period of 2017–2020. The risk-taking behavior includes the use of leverage, capital intensity, research and development intensity, and earnings uncertainty. The hypothesis test uses company fixed-effect regression.FindingsThe result shows that risk management committee moderates the effect of risk-taking behavior on companies’ performance. This research also finds the similar result when risk management committee and risk-taking behavior are examined on the future performance. In the further analysis, the result also finds that the expertise of risk management committee moderates the effect of risk-taking behavior on companies’ performance.Originality/valueThis research contributes to fill the previous gap of risk-taking behavior and companies’ performance by considering the existence of risk management committee to promote oversight role on risk-taking behavior. This research also contributes to give new evidence in Indonesia about the role of risk management committee to improve the benefits or to reduce the costs of risk-taking behavior.

Is voluntary risk disclosure informative? The role of UK firm-level governance

“…This supports H6(a) that firms with larger audit committees disseminate more VRD. This supports the perspective that larger audit committees have a diversified knowledge base and are vital in improving the monitoring quality of corporate boards (Muqorobin et al, 2023;Karamanou and Vafeas, 2005). It also supports prior research reporting a substantial impact of audit committee size on the disclosure of voluntary information (e.g.…”

“…Audit committees in firms play a central role in reducing conflicts of interest between directors and shareholders, leading to lower risks of lawsuits (Krishnan and Lee, 2009). The audit committee reviews the corporate internal control procedures and risk management system (Muqorobin et al, 2023). It is, therefore, crucial for corporations to effectively exercise monitoring and disciplinary Is voluntary risk disclosure informative?…”