Article Sidebar

Download
PDF
Statistic
Read Counter : 383 Download : 446

Downloads

Download data is not yet available.

Main Article Content

Abstract

The objective of this study is to investigate to which extend does Enterprise Risk Management Advanced (ERMADV) implementation impacts the firm performance and the moderated value by ESG performance. The assessment of ERMADV implementation level is conducted by using eight components derived from governance and firm operating activities with related measurements  on Organization for Economic Cooperation and Development (OECD) principle and COSO ERM-Integrated Framework. Board Gender Diversity, Board of Commissioner Size, Firm Size, Leverage and Return on Equity (ROE) were further included in this study as control variables. This study focuses on the manufacture and mining industry registered on the Indonesia Stock Exchange website from year 2015 to 2021. The findings of this research indicate that ERMADV significantly affects firm performance and value. In addition, it is discovered that ESG plays a moderating influence. Furthermore, ESG suggests that an advanced ERM framework will prioritize risks associated with ESG-related aspects to find out whether or not it is resilient and integrated. As a result, this strategy will direct organizations in developing ethical decision-making strategies, thus, improving financial performance and firm value.

Keywords

Advanced Enterprise Risk Management (ERMADV) Implementation Company Performance Company Value ESG Manufacture Industry Mining Industry

Article Details

Creative Commons License

This work is licensed under a Creative Commons Attribution 4.0 International License.

Creative Commons License
This work is licensed under a Creative Commons Attribution 4.0 International License.

How to Cite
Maharani, C., & Yonnedi, E. (2023). The Influence of Advanced Enterprise Risk Management Implementation Analyses : The Role Of Environmental, Social and Governance Performances. Ilomata International Journal of Management, 4(3), 267-286. https://doi.org/10.52728/ijjm.v4i3.830

References

  1. Agustina, L., & Baroroh, N. (2016). The relationship between Enterprise Risk Management (ERM) and firm value mediated through the financial performance. Review of Integrative Business and Economics Research, 5(1), 128–138.
  2. Aziz, N. A. A., Manab, N. A., & Othman, S. N. (2016). Sustainability Risk Management (SRM): An Extension of Enterprise Risk Management (ERM) Concept. International Journal of Management and Sustainability, 5(1), 1–10. https://doi.org/10.18488/journal.11/2016.5.1/11.1.1.10
  3. Bahrudin, M. (2016). Desain Implementasi ISO 31000 Sebagai Panduan Manajemen Risiko Di Unit Dokumentasi Dan Data Standarisasi Pusido BSN. Conference: Seminar Dan Knowledge Sharing Kepustakawanan Forum Perpusdokinfo LPNK Ristek, June 2016.
  4. Barney (1991).pdf. (n.d.).
  5. Baxter, R., Bedard, J. C., Hoitash, R., & Yezegel, A. (2013). Enterprise risk management program quality: Determinants, value relevance, and the financial crisis. Contemporary Accounting Research, 30(4), 1264–1295. https://doi.org/10.1111/j.1911-3846.2012.01194.x
  6. Beasley, M., Pagach, D., & Warr, R. (2008). Information conveyed in hiring announcements of senior executives overseeing enterprise-wide risk management processes. Journal of Accounting, Auditing and Finance, 23(3), 311–332. https://doi.org/10.1177/0148558X0802300303
  7. Bouslah, K., Kryzanowski, L., & M’Zali, B. (2013). The impact of the dimensions of social performance on firm risk. Journal of Banking and Finance, 37(4), 1258–1273. https://doi.org/10.1016/j.jbankfin.2012.12.004
  8. Brigham, E. F., Houston, J. F., & Eugene, F. (2009). Fundamentals of financial management, concise Edition. Cengage Learning.
  9. Buallay, A. (2019). Is sustainability reporting (ESG) associated with performance? Evidence from the European banking sector. Management of Environmental Quality: An International Journal, 30(1), 98–115. https://doi.org/10.1108/MEQ-12-2017-0149
  10. Callahan, C., & Soileau, J. (2017). Does Enterprise risk management enhance operating performance? Advances in Accounting, 37, 122–139. https://doi.org/10.1016/j.adiac.2017.01.001
  11. Cecilia, Rambe, S., & Torong, M. Z. B. (2015). Analisis pengaruh corporate social responsibility , Profitabilitas dan ukuran perusahaan terhadap nilai perusahaan yang go public di Indonesia, Malaysia, dan Singapura. Jurnal Akuntansi, Hal 1-22.
  12. COSO. (2004). COSO ERM framework released. Internal Auditor, 61(5), 17–19.
  13. COSO and WBCSD. (2018). Enterprise risk management: Applying enterprise risk management to environmental, social and governance-related risks. Enterprise Risk Management: Applying Enterprise Risk Management to Environmental, Social and Governance-Related Risks, 300–317. https://www.coso.org/Documents/COSO-WBCSD-ESGERM-Guidance-Full.pdf
  14. Devi, S., Budiasih, I. G. N., & Badera, I. D. N. (2017). Pengaruh Pengungkapan Enterprise Risk Management Dan Pengungkapan Intellectual Capital Terhadap Nilai Perusahaan. Jurnal Akuntansi Dan Keuangan Indonesia, 14(1), 20–45. https://doi.org/10.21002/jaki.2017.02
  15. Dunn, J., Fitzgibbons, S., & Pomorski, L. (2017). Assessing Risk Through Environmental, Social and Governance Exposures. Www.Joim.Com Journal Of Investment Management, 16(1), 4–17. www.joim.com
  16. Florio, C., & Leoni, G. (2017). Enterprise risk management and firm performance: The Italian case. British Accounting Review, 49(1), 56–74. https://doi.org/10.1016/j.bar.2016.08.003
  17. Fraj, E., Martínez, E., & Matute, J. (2011). Green marketing strategy and the firm’s performance: The moderating role of environmental culture. Journal of Strategic Marketing, 19(4), 339–355. https://doi.org/10.1080/0965254X.2011.581382
  18. Godfrey, P. (2010). The Effect of Firm Compensation Structures on the Mobility and Entrepreneurship of Extreme Performers. Business, 920(October), 1–43. https://doi.org/10.1002/smj
  19. Gordon, L. A., Loeb, M. P., & Tseng, C. Y. (2009). Enterprise risk management and firm performance: A contingency perspective. Journal of Accounting and Public Policy, 28(4), 301–327. https://doi.org/10.1016/j.jaccpubpol.2009.06.006
  20. Hoyt, R. E., & Liebenberg, A. P. (2011). The Value of Enterprise Risk Management. Journal of Risk and Insurance, 78(4), 795–822. https://doi.org/10.1111/j.1539-6975.2011.01413.x
  21. Khan, S. N., & Ali, E. I. E. (2017). The Moderating Role of Intellectual Capital Between Enterprise Risk Management and Firm Performance: A Conceptual Review. American Journal of Social Sciences and Humanities, 2(1), 9–15. https://doi.org/10.20448/801.21.9.15
  22. Lechner, P., & Gatzert, N. (2018). Determinants and value of enterprise risk management: empirical evidence from Germany. European Journal of Finance, 24(10), 867–887. https://doi.org/10.1080/1351847X.2017.1347100
  23. Meulbroek, L. K. (2002). a Senior Manager’S Guide To Integrated Risk Management. Journal of Applied Corporate Finance, 14(4), 56–70. https://doi.org/10.1111/j.1745-6622.2002.tb00449.x
  24. Pagach, D., & Warr, R. (2010). Incentives for Financial Risk Management in Vietnamese Enterprises: A Study on TheirDeterminants. Journal of Economics Development, 22(2), 85–101. https://doi.org/10.24311/jed/2015.22.2.02
  25. Parfitt, C. (2020). ESG integration treats ethics as risk, but whose ethics and whose risk? Responsible investment in the context of precarity and risk-shifting. Critical Sociology, 46(4–5), 573–587.
  26. Parmar, B. L., Freeman, R. E., Harrison, J. S., Wicks, A. C., Purnell, L., Bidhan, L., Edward, R., Jeffrey, S., & Andrew, C. (2011). The Academy of Management Annals Stakeholder Theory : The State of the Art Stakeholder Theory : The State of the Art. Management, 936836193, 403–445.
  27. Pérez-Cornejo, C., de Quevedo-Puente, E., & Delgado-García, J. B. (2019). How to manage corporate reputation? The effect of enterprise risk management systems and audit committees on corporate reputation. European Management Journal, 37(4), 505–515. https://doi.org/10.1016/j.emj.2019.01.005
  28. Shad, M. K., Lai, F. W., Fatt, C. L., Klemeš, J. J., & Bokhari, A. (2019). Integrating sustainability reporting into enterprise risk management and its relationship with business performance: A conceptual framework. Journal of Cleaner Production, 208, 415–425. https://doi.org/10.1016/j.jclepro.2018.10.120
  29. Vinet, L., & Zhedanov, A. (2011). A ‘missing’family of classical orthogonal polynomials. Journal of Physics A: Mathematical and Theoretical, 44(8), 85201.
  30. World Business Council for Sustainable Development (WBCSD). (2017). Sustainability and enterprise risk management: The first step towards integration. 1–52. https://www.integratedreporting.org/resource/wbcsd-sustainability-and-enterprise-risk-management-the-first-step-towards-integration/