ENTERPRISE RISK MANAGEMENT AND ITS IMPACT ON CORPORATE PERFORMANCE: A STUDY ON MALAYSIAN PUBLIC LISTED COMPANIES

In maximizing shareholder‟s wealth, management operational maneuver is typically calibrated to improve the valuation of the company‟s shares. But in the process, managers have to deal with a single most crucial element in corporate management: risk. This paper presents findings of a preliminary stud...

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Main Author: Lai, Fong Woon
Format: Conference or Workshop Item
Institution: Universiti Teknologi Petronas
Record Id / ISBN-0: utp-eprints.8035 /
Published: 2007
Subjects:
HG Finance
Online Access: http://eprints.utp.edu.my/8035/1/FULLPaper_Lai_FW_ERM_and_Corporate_Performance.pdf
http://eprints.utp.edu.my/8035/
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spelling utp-eprints.80352017-03-20T01:57:04Z ENTERPRISE RISK MANAGEMENT AND ITS IMPACT ON CORPORATE PERFORMANCE: A STUDY ON MALAYSIAN PUBLIC LISTED COMPANIES Lai, Fong Woon HG Finance In maximizing shareholder‟s wealth, management operational maneuver is typically calibrated to improve the valuation of the company‟s shares. But in the process, managers have to deal with a single most crucial element in corporate management: risk. This paper presents findings of a preliminary study of an ongoing research to examine the impact of the implementation of enterprise risk management (ERM) on corporate performance and value. ERM focuses risk management function from primarily defensive to increasingly offensive and strategic in nature. However, the neo-classical finance theory postulates that firm-specific risk is irrelevant and that only the covariance of the firm‟s asset returns to the market portfolio which is measured by the beta in the capital asset pricing model (CAPM) matters. This suggests that implementation of ERM is of no value to firms. To vindicate the theory, the authors test several hypotheses concerning the relationships between the ERM implementation process, the performance of the enterprise, as well as its effect on corporate risk profile. This study also examines the profile and the penetration depth of ERM practices among the listed companies. Results of the empirical analysis show that ERM practices do have an impact on business performance and corporate value. The results also imply that ERM implementation is consistent with the value maximization hypothesis. 2007-07 Conference or Workshop Item PeerReviewed application/pdf http://eprints.utp.edu.my/8035/1/FULLPaper_Lai_FW_ERM_and_Corporate_Performance.pdf Lai, Fong Woon (2007) ENTERPRISE RISK MANAGEMENT AND ITS IMPACT ON CORPORATE PERFORMANCE: A STUDY ON MALAYSIAN PUBLIC LISTED COMPANIES. In: International Conference on Business and Information, 2007, Tokyo, Japan. http://eprints.utp.edu.my/8035/
institution Universiti Teknologi Petronas
collection UTP Institutional Repository
topic HG Finance
spellingShingle HG Finance
Lai, Fong Woon
ENTERPRISE RISK MANAGEMENT AND ITS IMPACT ON CORPORATE PERFORMANCE: A STUDY ON MALAYSIAN PUBLIC LISTED COMPANIES
description In maximizing shareholder‟s wealth, management operational maneuver is typically calibrated to improve the valuation of the company‟s shares. But in the process, managers have to deal with a single most crucial element in corporate management: risk. This paper presents findings of a preliminary study of an ongoing research to examine the impact of the implementation of enterprise risk management (ERM) on corporate performance and value. ERM focuses risk management function from primarily defensive to increasingly offensive and strategic in nature. However, the neo-classical finance theory postulates that firm-specific risk is irrelevant and that only the covariance of the firm‟s asset returns to the market portfolio which is measured by the beta in the capital asset pricing model (CAPM) matters. This suggests that implementation of ERM is of no value to firms. To vindicate the theory, the authors test several hypotheses concerning the relationships between the ERM implementation process, the performance of the enterprise, as well as its effect on corporate risk profile. This study also examines the profile and the penetration depth of ERM practices among the listed companies. Results of the empirical analysis show that ERM practices do have an impact on business performance and corporate value. The results also imply that ERM implementation is consistent with the value maximization hypothesis.
format Conference or Workshop Item
author Lai, Fong Woon
author_sort Lai, Fong Woon
title ENTERPRISE RISK MANAGEMENT AND ITS IMPACT ON CORPORATE PERFORMANCE: A STUDY ON MALAYSIAN PUBLIC LISTED COMPANIES
title_short ENTERPRISE RISK MANAGEMENT AND ITS IMPACT ON CORPORATE PERFORMANCE: A STUDY ON MALAYSIAN PUBLIC LISTED COMPANIES
title_full ENTERPRISE RISK MANAGEMENT AND ITS IMPACT ON CORPORATE PERFORMANCE: A STUDY ON MALAYSIAN PUBLIC LISTED COMPANIES
title_fullStr ENTERPRISE RISK MANAGEMENT AND ITS IMPACT ON CORPORATE PERFORMANCE: A STUDY ON MALAYSIAN PUBLIC LISTED COMPANIES
title_full_unstemmed ENTERPRISE RISK MANAGEMENT AND ITS IMPACT ON CORPORATE PERFORMANCE: A STUDY ON MALAYSIAN PUBLIC LISTED COMPANIES
title_sort enterprise risk management and its impact on corporate performance: a study on malaysian public listed companies
publishDate 2007
url http://eprints.utp.edu.my/8035/1/FULLPaper_Lai_FW_ERM_and_Corporate_Performance.pdf
http://eprints.utp.edu.my/8035/
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score 11.62408

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