Can the risk management committee improve risk management disclosure practices in Indonesian companies?

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This study examines the role of the risk management committee as a moderating variable. The risk management committee will moderate the relationship between firm size, profitability, ownership concentration, and the size of the Enterprise Risk Management (ERM) disclosure board. The study is based on agency theory, which discusses the relationship between management and company owners and shareholders. The research sample consisted of 56 manufacturing companies in Indonesia with 224 units of analysis obtained using the purposive sampling technique. It has been proven that the risk management committee can moderate the relationship between firm size and ERM disclosure and ownership concentration and ERM disclosure. Company size is known to affect the disclosure of risk management in a company. But ownership concentration shows different things, that is, it does not affect corporate risk management disclosures. The results also show that the risk management committee cannot moderate the relationship between profitability and the size of the board of commissioners on the company’s risk management disclosures. It has also not been proven that profitability and the size of the board of commissioners directly affect corporate risk management disclosures. Thus, it can be stated that the risk management committee plays a role in controlling the extent of the company’s risk management disclosures; this is necessary to maintain stakeholder trust in the company.

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    • Table 1. Descriptive statistical analysis
    • Table 2. Test results
    • Conceptualization
      Linda Agustina, Kuat Waluyo Jati
    • Data curation
      Linda Agustina, Niswah Baroroh, Pery N. Manurung
    • Investigation
      Linda Agustina, Niswah Baroroh, Ardian Widiarto
    • Methodology
      Linda Agustina, Ardian Widiarto
    • Supervision
      Linda Agustina
    • Writing – original draft
      Linda Agustina, Kuat Waluyo Jati, Pery N. Manurung
    • Writing – review & editing
      Linda Agustina, Kuat Waluyo Jati, Niswah Baroroh, Ardian Widiarto
    • Formal Analysis
      Kuat Waluyo Jati, Ardian Widiarto
    • Project administration
      Kuat Waluyo Jati, Niswah Baroroh, Pery N. Manurung
    • Validation
      Kuat Waluyo Jati
    • Visualization
      Niswah Baroroh, Ardian Widiarto, Pery N. Manurung
    • Resources
      Pery N. Manurung