Effect of enterprise risk management and corporate governance mechanisms on firm performance: Evidence from listed companies in Indonesia
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Author(s)Rita AnugerahLink to ORCID Index: https://orcid.org/0000-0003-3187-6403
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Nadila Rizki AriyantoLink to ORCID Index: https://orcid.org/0009-0000-8936-1088
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Ria Nelly SariLink to ORCID Index: https://orcid.org/0000-0002-4559-7467
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DOIhttp://dx.doi.org/10.21511/ppm.21(3).2023.46
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Article InfoVolume 21 2023, Issue #3, pp. 589-600
- 423 Views
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125 Downloads
This work is licensed under a
Creative Commons Attribution 4.0 International License
This study aims to assess the influence of enterprise risk management and corporate governance mechanisms on companies’ financial and market performance. This study’s population is all companies registered on the Indonesia Stock Exchange in 2019. The purposive sampling method was used to select 664 listed companies to obtain a total sample of 242 companies. This study used a quantitative approach and analyzed data using Partial Least Square (PLS). The results showed that enterprise risk management (p < 0.01; β = 0.28) and corporate governance mechanisms (p = 0.01; β = 0.14) affect company financial performance. Enterprise risk management (p < 0.01; β = 0.16) affects company market performance, but corporate governance mechanisms (p = 0.24; β = 0.05) do not affect company market performance. This paper gives stakeholders a better understanding of the relationship between enterprise risk management, corporate governance, financial performance, and corporate market performance; consequently, it can serve as a resource for decision-making. For management, these results can be used as a guideline for taking appropriate steps in managing risk and implementing corporate governance to improve the company’s financial and market performance.
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JEL Classification (Paper profile tab)L25, G32, G34, L32
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References60
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Tables4
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Figures1
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- Figure 1. Path analysis model
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- Table 1. Research sample
- Table 2. Descriptive statistics
- Table 3. Correlation among latent variables with square roots of AVEs
- Table 4. PLS path analysis coefficient results
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Industrial development in Saudi Arabia: disparity in growth and development
Anis Ali
doi: http://dx.doi.org/10.21511/ppm.18(2).2020.03
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Why banks should consider ESG risk factors in bank lending?
Sarwar Uddin Ahmed ,
Samiul Parvez Ahmed ,
Ikramul Hasan
doi: http://dx.doi.org/10.21511/bbs.13(3).2018.07
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Integrated reporting and financial performance of South African listed banks
Reon Matemane ,
Rozane Wentzel
doi: http://dx.doi.org/10.21511/bbs.14(2).2019.11
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