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In most financial institutions, chief risk officers (CROs) and their risk management (RM) staff fulfill a role in managing risk exposures, yet their lack of involvement in the governance has been cited as an influential factor that contributed to the financial crisis of 2007-2008. Various legislative and regulatory bodies have pressured financial firms to improve their risk governance structures to better weather potential future crises. Assuming that CROs and risk committees are given sufficient power to influence the corporate governance of financial institutions, can CROs and risk committees protect financial institutions from violating litigable securities law? Can they improve bank performance? The paper aims to discuss these issues.

The authors employ a principal component analysis to construct a single measure that captures various aspects of RM in a firm. The authors compare the risk governance characteristics of sued firms with their non-sued peers and consider one of the final outcomes of risky behavior: shareholder litigation. The authors compute ROA and buy-and-hold abnormal returns to capture operating and stock performance and examine whether risk governance improves bank performance by reducing litigation risk.

Proper risk governance reduces a firm’s litigation probability. The addition of the RM factor to models that have been previously proposed in the literature improves the accuracy of those models in identifying companies that are most susceptible to class action lawsuits. Better RM improves the financial and stock price performance of financial institutions.

The data collection is laborious as the information about CRO governance has to be hand-collected from the 10-K report. A broader sample employing, e.g., non-US banks may provide additional insights into the relationship between RM practices, shareholder litigation, and bank performance.

The study shows that a bank’s RM functions play a critical role in improving bank and operating performance and in reducing shareholder litigation. Banks should emphasize the RM function.

This is the first study to examine the mechanism behind the positive association between RM and bank performance. The study shows that better RM improves overall bank performance by decreasing litigation risk.

This paper investigates how different types of corporate political connection, including government-linked investment (GLI), former officials as politically-connected directors (PCD), cronyism (CRO) and government leaders' family ties (FAM), influence financial distress risk in Malaysian firms.

We separate political connections into four distinct categories and investigate their relationship with firm distress risk and compare the results with the one-size-fits-all treatment which is popular in the literature. We apply a battery of sensitivity test to ensure that our inferences are robust to a wide range of test specifications, endogeneity concern and sample selection methods.

The empirical results show that the effect of political connections on distress risk is strongly heterogeneous. GLI and PCD firms tend to have higher distress risk via increased risk-taking behaviors because of the different incentives of the connections, while this nexus does not directly exhibit in CRO and FAM firms. Further analyses reveal that CRO and FAM firms are more likely to venture into risky international diversification, thus indirectly amplifying their distress risk.

Our findings are novel and provide practical implications for financial analysts, investors and portfolio managers operating in the capital markets.

Despite the importance of incorporating social media with customer relationship management (CRM), the implementation of social CRM is still in its initial stages for a majority of green brands. The purpose of this paper is to examine whether consumers’ perception-based factors of the online CRM tactics through social media (i.e. perceived marketer-dominated information quality, perceived interaction quality, and perceived service content quality in social media) offered by the green brand were related to the perceived customer retention orientation (CRO) of the green fashion retailer, which was related to patronage intention towards the green retailer, and the moderating effect of green consciousness on the link between perceived CRO of the green retailer and patronage intention.

Data were collected from social media users (n=631) using a consumer panel via an online survey. Structural equation modelling was employed to test the proposed model and research hypotheses.

This study found that the perceived CRO of the green retailer was positively related to patronage intention. The perceived marketer-dominated information quality and perceived service content quality in social media were positively related to the perceived CRO of the green retailer. Green consciousness moderated the link between perceived CRO and patronage intention.

First, this study contributes to the further theoretical understanding of the underlying factors that influence customer perception of the CRO of the green retailer and green patronage intention. Second, on a managerial level, this proposed model provides green retailers with beneficial insights into the development of successful social CRM.

This paper aims to examine the influence of risk management (RM) practices on the credit risk of significantly supervised European banks.

To avoid regulatory and reporting discrepancies, this paper samples banks that come under the direct supervision of the European Central Bank. Significantly supervised European Banks are selected for the five years from 2013 to 2017. The RM and governance data is manually drawn (from annual reports, registration documents, governance and RM reports), and financial data sets are also used (from Moody’s BankFocus and ORBIS).

The results indicate that strong risk control and supervision by a powerful chief risk officer (CRO) reduces banks’ credit risk. Banks with sufficiently powerful and independent CROs tend to manage their risks effectively, therefore reporting lower credit risk.

European Union introduced Capital Requirement Directive IV in 2013 and new guidelines on the banks' internal governance in 2017, which were to be implemented in 2018. Thus, this paper limited the sample to five years (from 2013 to 2017) to avoid inconsistencies in the results. Future studies can extend the research and compare banks' credit risk before and after the implementation of regulatory guidelines.

Since the global financial crisis, the regulatory environment has sufficiently changed. Hence, this study reveals that not all RM practices but a few important ones reduce credit risk.

Effective risk control and supervision at the bank level can lower credit risk, ultimately enhancing overall financial stability.

Most existing studies focus on classic governance indicators to analyze banks’ credit risk; however, this paper considers risk governance indicators which include RM practices used by European banks. Moreover, existing studies in this line focus on the crisis period of 2007–2008. This paper considered the postfinancial crisis period, specifically after the implementation of the Capital Requirements Directive IV at the European level.

Enterprise risk management (ERM) has become an important subject of increasing interest among companies throughout the world. It is gaining global attention among risk management professionals and academics. However, little is known about the extent of ERM implementation in the Tunisian context. More importantly, there are limited studies in literature that examine the determinants of this implementation. The purpose of this study is threefold, to propose an index to measure the level of ERM implementation, to examine the level of ERM implementation in Tunisian companies and to propose a conceptual framework for the determinants of this implementation. From the review of literature, several factors are found to be determinants of ERM implementation. Such factors are the presence of a Chief Risk Officer, the appointment of an internal auditor, the type of industry and the firm size.

To further understand the relation between ERM implementation and its determinants, a questionnaire survey was conducted in 2016 and administrated to 80 companies. Respondents were CRO and more often internal auditors or financial directors. Other data were collected from annual reports and notes to the financial statements. Along with this, the ordinal regression was applied to test the dependence between ERM implementation and its determinants.

Based on the data gathered, Tunisian companies have shown an increasing interest in risk management in the post-revolution context; however, an integrated approach of ERM implementation is still at an early stage. Descriptive statistics suggest that ERM is essentially developed in financial institutions, especially in banks and some large companies operating in non- financial industries. With regard to the multivariate regression results, the level of ERM implementation is positively related to the presence of a Chief Risk Officer, internal auditor, the type of industry and the firm size.

This study attempts to contribute to the risk management literature in two ways. Conceptually, this study proposes an ERM index to assess the level of ERM implementation. Empirically, it provides some empirical evidence that highlights factors which determine the level of ERM implementation. Therefore, this study will extend the scope of literature by providing novel empirical evidence by exploring the Tunisian context.

This paper aims to investigate various institutional pressures driving the adoption and implementation of a new risk management system; enterprise risk management (ERM).

The implementation of ERM-related practices is analysed based on an institutional framework and drawing on empirical evidence from multiple sources in ten large/medium-sized insurance companies. This paper focuses on extra-organisational pressures exerted by political, social and economic institutions on insurance companies which drove the adoption decision.

It was found that different change agents have taken part in the decision to introduce new risk management system as a part of ERM implementation process. Further, the institutional pressures, coercive, mimetic and normative, were found to differ in character and strength over different intervals of time in relation to the adoption of ERM. Companies that adopted ERM early were mostly driven by internal strategic drivers, whereas the recent adoption decision was more driven by coercive and mimetic pressures. Thus, evidence of divergence between insurance companies was found.

The findings have implications for policy makers, regulatory agencies and innovation developers. ERM was considered not only as a necessity but also as a value added to the insurance companies under study. Thus, regulators and innovation developers should survey main players in any specific organisational field to understand their views before issuing new compulsory regulations or developing innovations. They also need to consider exploring companies’ experiences with ERM, which can provide a basis for the development of strengthened and more informative regulatory ERM frameworks. This will support a faster and easier understanding and implementation of ERM framework hindered by the confusions companies may face when considering the complicated/changing regulatory and risk requirements.

This study extends the scope of institutional analysis to the risk management field, particularly ERM and to the explanation of how different institutions affect the decision to move towards ERM and modify the risk management rules applied within the organisational environment. It looks not only at convergences but also divergences associated with the period of time when ERM adoption decision was made. Thus, it develops a processual view of change.

The paper aims to provide insights into executives' perceptions of risk management disclosures and such disclosures' determinants. The paper extends the emerging literature by using institutional theories in the context of a developing country.

Semi-structured in-depth interviews were conducted with 36 executives directly involved in risk management disclosures, policy-making and monitoring.

The interview data show evidence that corporate risk management disclosures are still at a low level. The reasons for non-disclosure can be related to institutional weaknesses, lack of disciplinary action and political interference. Additionally, central bank autonomy, limited perception of accountability, demand from influential stakeholders, lack of financial literacy, aim to keep annual reports brief, etc. results in the dearth of risk disclosure by the banks.

The study suggests that understanding the importance of risk management disclosures and preparing for the uncertainty will keep the business moving.

The study seeks to contribute to the literature by investigating the executives' perceptions of risk management disclosures and its' determinants in the context of a developing country where non-compliance to the regulatory standard is high.

There are two main industry-sanctioned enterprise risk management (ERM) models, that is, COSO 2004 and ISO 31000:2009, that firms refer to when implementing ERM programs. Taken together, the two ERM models specify that firms should implement ERM programs to meet a strategic need, improve operations and reporting or to comply with government regulations or industry best practices. In addition, the focus of ERM implementation should be either the subsidiary, business unit, division, firm/entity or global level. The purpose of this study is to investigate whether firms are aligning their ERM implementations with these tenets: strategy, operations, reporting, compliance and the level of implementation.

The proxy for ERM implementation is the hiring of a Chief Risk Officer (CRO). The research data come from a sample of 122 US firms that issued a press release following the hiring of a CRO between 2010 and 2014. The press releases were retrieved and aggregated through content analysis in LexisNexis Academic.

The results reveal that many ERM implementations are occurring at the firm/entity level, and with the exception of reporting, firms consider ERM to be a strategic firm resource capable of improving business operations and compliance initiatives.

There is a dearth of research studies specifically investigating whether ERM programs adopted by firms are aligned with the specification of COSO 2004 and ISO 31000:2009 frameworks. The apparent lack of a clear understanding of the alignment between the firm ERM programs and the industry’s ERM frameworks may limit the development and implementation of ERM and the eventual realization of the benefits associated with a successful ERM implementation.

The purpose of this paper is to adopt a contingency theory from a quality perspective to develop a model for assessing the impact of counterfeit prevention efforts on supply chain (SC) performance.

Based on the participation of 140 managers across ten industry sectors, a theoretical model is proposed and structural equation modeling is used to examine the relationships among SC risk management integration, SC counterfeit risk orientation (CRO), SC counterfeit risk mitigation (CRM), SC metric consistency (MC) and SC performance (service and cost benefits).

Findings suggest that firms with greater SC risk management integration have a stronger orientation toward counterfeit risk, greater maturity in CRM, more consistent SC metrics and better SC performance outcomes. CRO alone was not found to significantly improve SC MC.

Results are based on managerial perceptions of SC counterfeit risk and performance metrics. Survey respondents were predominantly from the same country (the USA).

The paper represents a potential quality management framework for SC risk management, in the context of counterfeiting that includes a contingency perspective.

The study advances knowledge of how firms may address the challenging issue of counterfeiting in the SC. Empirical findings offer a firm-level quality management framework for managerial decision making in the context of counterfeiting.