Home \ Archives\vol 1, No 1, 2025\ Articles
FACTORS INFLUENCING ADOPTION OF ENTERPRISE RISK MANAGEMENT
- ABDULKARIM EMRAN JIBREEL ALI1 & ABDELWAHAB OMRAN GEBRIL
- University of Benghazi, Al-Abyar Branch, Higher Institute of Sciences and Technology, Al-Abyar, Libya.
DOI: 10.64587/NSJAPGSaaag
Volume (1), Issue (1) , June 2025
Published: 06/30/2025
Keywords: Factors, Influencing, ERM, Adoption, business, organization, companies
Abstract: In the new global economy, Enterprise Risk Management (ERM) becomes a main issue in making a good evaluation of a firm’s risk situation and can increasingly improve decision-making to be effective in strategic and operational development for managing the risks. Thus, this paper aimed at reviewing some previous studies on Enterprise Risk Management, particularly on factors that significantly influence ERM, such size of the firm, board independence, organization culture, and the chief risk officer. The study was conducted based on secondary data by reviewing some of the past studies related to ERM. In conclusion, this study indicated that the firm’s size has a considerably beneficial influence on the adoption of ERM, which is consistent with previous studies, even though there are still few empirical works and studies on ERM. It was also discovered that hiring a CRO had a positive effect on ERM adoption, indicating the establishment of an ERM program within the organisation.
References
Abdelsalam, O., & El-Masry, A. (2008). The impact of board independence and ownership structure on the timeliness of corporate internet reporting of Irish-listed companies. Managerial Finance, 34(12), 907–918. https://doi.org/10.1108/03074350810915842
Ahmad, M. S. (2012). Impact of organizational culture on performance management practices in Pakistan. Business Intelligence Journal, 5(1), 50–55.
Anton, S. G., & Nucu, A. E. A. (2020). Enterprise risk management: A literature review and agenda for future research. Journal of Risk and Financial Management, 13(281), 1–22. https://doi.org/10.3390/jrfm13110281
Banham, R. (2004). Enterprising views of risk management. Journal of Accountancy, 197(6), 65. https://web.actuaries.ie/sites/default/files/erm-resources/109_enterprising_views_of_risk_management.pdf
Beasley, M., Clune, R., & Hermanson, D. R. (2005). Enterprise risk management: An empirical analysis of factors associated with the extent of implementation. Journal of Accounting and Public Policy, 24, 521–531. https://doi.org/10.1016/j.jaccpubpol.2005.10.001
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 & Finance, 23, 311–332. https://doi.org/10.1177/0148558X0802300303
Bevin, L. (2022, November 29). What does risk management involve? https://www.zengrc.com/blog/what-does-risk-management-involve/
Boslaugh, S. (2007). An introduction to secondary data analysis. In Secondary data sources for public health: A practical guide (pp. 2–10).
Casualty Actuarial Society (CAS). (2003). Overview of enterprise risk management. http://www.casact.org/research/erm/overview.pdf
Cendrowski, H., & Mair, W. C. (2009). Enterprise risk management and COSO: A guide for directors, executives, and practitioners. Hoboken, NJ: John Wiley & Sons.
Cheah, F. S., & Lee, L. S. (2009). Corporate governance in Malaysia: Principles and practice. August Publishing Sdn Bhd.
Cheng, H. G., & Phillips, M. R. (2014). Secondary analysis of existing data: Opportunities and implementation. Shanghai Archives of Psychiatry, 26(6), 371–375. https://dx.doi.org/10.11919/j.issn.1002-0829.214171
Choi, Y., Ye, X., Zhao, L., & Luo, A. C. (2015). Optimizing enterprise risk management: A literature review and critical analysis of the work of Wu and Olson. Annals of Operations Research, 237(1–2), 281–300.
Committee of Sponsoring Organizations (COSO). (2004). Enterprise risk management: Integrated framework. New York, NY: COSO.
D’Arcy, S. P., & Brogan, J. C. (2001). Enterprise risk management. Journal of Risk Management of Korea, 12(1), 207–228.
Daud, W. W., Yazid, A. S., & Hussin, M. R. (2010). The effect of chief risk officer on enterprise risk management practices: Evidence from Malaysia. International Business and Economics Research Journal, 9(11), 55–64. https://doi.org/10.19030/iber.v9i11.30
Desender, K. A. (2007). On the determinants of enterprise risk management implementation. In N. S. Shi & G. Silvius (Eds.), Enterprise IT governance, business value and performance measurement. IGI Global.
Drennan, L. T., & Allan, M. (2007). Risk and crisis management in the public sector. Routledge.
Gatzert, N., & Martin, M. (2015). Determinants and value of enterprise risk management: Empirical evidence from the literature. Risk Management and Insurance Review, 18(1), 29–53.
Head, G. (2004, January). The duality of risk. Risk Management, 20–23.
Hopkin, P. (2002). Holistic risk management in practice. London: Witherby.
Kanhai, C., & Ganesh, L. (2014). Factors influencing the adoption of enterprise risk management (ERM) practices by banks in Zimbabwe. International Journal of Business and Commerce, 3(6), 1–17.
Khan, M. J., Hussain, D., & Mehmood, W. (2016). Why do firms adopt enterprise risk management (ERM)? Empirical evidence from France. Management Decision, 54, 1886–1907. https://doi.org/10.1108/MD-09-2015-0400
Kimbrough, R. L., & Componation, P. (2015). The relationship between organizational culture and enterprise risk management. Engineering Management Journal, 21(2), 18–26. https://doi.org/10.1080/10429247.2009.11431803
Liebenberg, A., & Hoyt, R. (2003). The determinants of enterprise risk management: Evidence from the appointment of chief risk officers. Risk Management and Insurance Review, 6(1), 37–52.
Losby, J. L., & Wetmore, A. (2012). CDC Coffee Break: Using Likert scales in evaluation survey work. https://www.cdc.gov/dhdsp/pubs/docs/cb_february_14_2012.pdf
Malik, S. A., & Holt, B. (2013). Factors that affect the adoption of enterprise risk management (ERM). OR Insight, 26(4), 253–269.
Merna, T., & Al-Thani, F. F. (2005). Corporate risk management: An organisational perspective. London: John Wiley & Sons.
Paape, L., & Speklè, R. F. (2012). The adoption and design of enterprise risk management practices: An empirical study. European Accounting Review, 21(3), 533–564.
Ribeiro Serra, F. A., Fellipe Silva Martins, F. S., & Júlio Araujo Carneiro da Cunha, J. A. (2018). Secondary data in research – uses and opportunities. Revista Ibero Americana de Estratégia, 17(4), 01–04. https://doi.org/10.5585/ijsm.v17i4.2723
Rosa, de la S. (2006). Board influences cultivating the best board. Accountancy SA.
Simona-Iulia, C. (2011). Comparative study between traditional and enterprise risk – a theoretical approach. Annals of Faculty of Economics, 276–282.
Stoh, P. J. (2005). Enterprise risk management at United Healthcare. Strategic Finance (July), 27–35.
The Committee of Sponsoring Organizations (COSO). (2004). Enterprise risk management – integrated framework. https://www.coso.org/documents/Framework%20Reference%20Secured.pdf
Tillinghast-Towers Perrin. (2002). Enterprise risk management in the insurance industry—2002 benchmarking report. http://www.tillinghast.com/tillinghast/publications/reports/ERM_Insur_Ind_2002_benchmark_survey/ERM_2002_all.pdf
Van Staveren, M. (2009). Risk innovation and change. The Netherlands: Ipskamp Drukkers, B.V., Enschede.
Vartanian, T. P. (2010). Secondary data analysis. Oxford University Press.
Will Hillier, W. (2022, December 1). What is secondary data? A complete guide. Career Foundry. https://careerfoundry.com/en/blog/data-analytics/what-is-secondary-data/
Wolf, R. (2008). The evolution of enterprise risk management. The Actuary, 5(3), 19–22.