An Empirical Study on The Factor Influencing the Scope of Enterprise Risk Management Implementation

ABSTRACT

Policymakers continue to focus on ways to strengthen corporate governance and risk management, and enterprise risk management has evolved as a new paradigm for handling the spectrum of threats that businesses confront. Despite these advances, studies of the factors involved in ERM adoption are few. More investigation is required to explain why some businesses are adapting to new risks by adopting ERM while others are not. In this exploratory research, we look at how different firms in the United States and abroad are doing when it comes to implementing ERM. In our analysis of data from 123 organisations, we find that the presence of a chief risk officer, board independence, CEO and CFO apparent support for ERM, the presence of a Big Four auditor, entity size, and entities in the banking, education, and insurance industries are all positively related to the stage of ERM implementation. We also found that US businesses are often less advanced in their ERM procedures than their overseas counterparts. We hope the information presented here may serve as a springboard for further studies on ERM.

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