Effects of Corporate Governance Structures on Enterprise Risk Management Practices in Malaysia

Authors

  • Zuraidah Mohd-Sanusi Universiti Teknologi MARA
  • Shayan Motjaba-Nia Universiti Teknologi MARA
  • Nurul A. Roosle Kolej Matrikulasi Melaka
  • Ria Nelly Sari Universitas Riau
  • Agus Harjitok

Abstract

The risk management requirement, as part of best corporate governance practices has become compulsory for the Public Listed Companies (PLCs) in Malaysia. This study examines on the existing governance structures including establishment of Risk Management Committee (RMC), board independence, auditor quality and institutional ownerships would influence the extent of Enterprise Risk Management (ERM) practices. The study derived the aggregate ERM scores in measuring the relevant control and risk management practices of PLCs. For the purpose of the study, governance structure is proxied by RMC, board independence, auditor quality and institutional ownerships. Using a sample of large companies, data were regressed using regression analysis, based on three regression models. The study found that the establishment of risk management committee provided greater awareness of ERM within particular organization. However, the other governance variables have made less contribution to the risk management awareness and practices within a particular organization.

Keywords: enterprise risk management, corporate governance, Bursa listing requirement, monitoring mechanism, risk management committee

JEL Classifications: G3, G31

Downloads

Download data is not yet available.

Author Biographies

Zuraidah Mohd-Sanusi, Universiti Teknologi MARA

Senior Research FellowAccounting Research Institute

Shayan Motjaba-Nia, Universiti Teknologi MARA

Research AssociateAccounting Research Institute

Nurul A. Roosle, Kolej Matrikulasi Melaka

LecturerAccounting Department

Ria Nelly Sari, Universitas Riau

ProfessorDepartment of AccountingFaculty of Economics

Downloads

Published

2017-01-13

How to Cite

Mohd-Sanusi, Z., Motjaba-Nia, S., Roosle, N. A., Sari, R. N., & Harjitok, A. (2017). Effects of Corporate Governance Structures on Enterprise Risk Management Practices in Malaysia. International Journal of Economics and Financial Issues, 7(1), 6–13. Retrieved from https://www.econjournals.com/index.php/ijefi/article/view/2570

Issue

Section

Articles