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1 – 10 of over 151000Habib Mahama, Tarek Rana, Timothy Marjoribanks and Mohamed Z. Elbashir
Government reforms have seen shifts from rules-based to principles-based risk regulatory governance. This paper examines the effects of principles-based risk regulatory reforms on…
Abstract
Purpose
Government reforms have seen shifts from rules-based to principles-based risk regulatory governance. This paper examines the effects of principles-based risk regulatory reforms on public sector risk management (RM) and management control practices in public sector organizations (PSOs).
Design/methodology/approach
The principles-based regulation focuses on providing autonomy to PSOs while maintaining control over their actions without direct intervention. This resonates with Foucault's notion of how modern forms of governments operate. The research is informed by Foucault's concept of governmentality. The authors conducted a qualitative field study of an Australian PSO, gathering and analysing data from interviews, focus groups, and archival documents.
Findings
The findings show the capillary modes by which principles-based risk regulatory regime penetrates and works with management control practices in pursuit of regulatory goals within the PSO the authors studied. In addition, the authors find that the principles-based approach (focusing on autonomy) and rules-based approach (focusing on control) are not opposites in kind and effect but rather, autonomy should be understood as a central pillar of control. Furthermore, the findings show how cultural controls and formal controls are not in conflict but are interconnected in RM practices, with cultural controls providing control architecture for RM and formal control translating the control architecture into routines. Finally, the study provides insights into how enterprise risk management (ERM) provides capabilities for and routinizes RM practices in a PSO and the management control systems (MCS) that enabled this to occur.
Originality/value
The paper provides novel insights into how MCS are infiltrated, mobilized and deployed to enact principles-based risk regulatory reforms. These insights are useful for regulators, practitioners and researchers.
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The first purpose of this paper is to investigate whether corporate governance mechanisms, in particular the characteristics of the board, audit committee and risk management…
Abstract
Purpose
The first purpose of this paper is to investigate whether corporate governance mechanisms, in particular the characteristics of the board, audit committee and risk management committee, are associated with the level of disclosure in integrated reports of South African listed firms. The second purpose of this paper is to analyze how integrated reporting (IR) affects the sustainable development goals (SDGs).
Design/methodology/approach
This paper uses a mixed methods approach. First, a multiple regression analysis is used to estimate the impact of corporate governance mechanisms on IR practices of a sample of South African listed firms during the period between 2019 and 2021. Using the content analysis method to measure the level of IR, disclosures were measured using a disclosure index consisting of 60 information items developed from the IIRC framework and previous studies. Second, based on a database containing 33 articles in the Meditari Accountancy Research journal with a publication date from 2013 to 2021, a systematic review of the academic literature focusing on IR is conducted to analyze how IR influences SDGs.
Findings
The results indicate that board size, board independence and risk management committee independence have a positive effect on IR practices. However, board expertise, board activity, audit committee independence, audit committee size, audit committee expertise, audit committee meetings, risk management committee expertise, risk management committee meetings, risk management committee size and the auditor type are negatively related to IR practices. The results also indicate that IR has an important role in achieving SDGs by relying on integrated thinking that integrates sustainability into the enterprise’s strategy and helps the integration of capitals. In addition, sustainable business models create long-term values.
Research limitations/implications
This study was limited to a sample size of 75 firms, which is country-specific; however, it sets the tone for future empirical research on the subject matter. This study provides an avenue for future research in the area of corporate governance and IR practices in other emerging countries, especially other African countries.
Practical implications
This study provides useful insights for managers and policymakers to better understand which corporate governance mechanisms can best encourage a company to improve IR practices.
Originality/value
To the best of the author’s knowledge, this study is, perhaps, the first to examine the effect of risk management committee characteristics on IR practices. This study provides new insight into the contribution of accounting research toward the achievement of SDGs.
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Phimphakan Lebel, Niwooti Whangchai, Chanagun Chitmanat and Louis Lebel
– The purpose of this paper is to analyse how fish farmers manage climate-related risks and explore possible ways to strengthen risk management under current and future climate.
Abstract
Purpose
The purpose of this paper is to analyse how fish farmers manage climate-related risks and explore possible ways to strengthen risk management under current and future climate.
Design/methodology/approach
In total, 662 fish farmers in sites across Northern Thailand were interviewed about risks to the profitability of their fish farms and ways such risks were managed. Nonlinear canonical correlation analysis was used to relate risk factors to management practices at farm and river levels. In total, 68 in-depth interviews with farmers and other stakeholders provided additional information on climate risk management practices.
Findings
Farmers use a combination of adjustments to rearing practices, cropping calendars and financial and social measures to manage those risks, which they perceive as being manageable. Many risks are season, river and place specific; implying that the risk profiles of individual farms can vary substantially. Individual risks are often addressed through multiple practices and strategies; conversely, a particular management practice can have a bearing on several different risks. Farmers recognize that risks must be managed at farm and higher spatial and administrative scales. Social relations and information play critical roles in managing these complex combinations of risks.
Originality/value
This is one of the first papers to report in detail on how inland fish farmers manage climate-related risks. It underlines the need to consider multiple spatial and temporal scales and that farmers do not manage individual climate-related risks in isolation from other risks.
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The purpose of the paper is to determine if owners of small manufacturing companies manage supply risk in similar ways and identify the practices constituting this potential joint…
Abstract
Purpose
The purpose of the paper is to determine if owners of small manufacturing companies manage supply risk in similar ways and identify the practices constituting this potential joint approach.
Design/methodology/approach
An interpretive case based methodology was applied in this research. Interview data on the supply risk management practices of 11 SCOs (small company owners) were analysed.
Findings
The findings confirm that the 11 studied SCOs apply largely the same supply risk management practices, which can be characterised as defensive. The approach covers risk elimination practices such as knowledge protection and local sourcing as the major practices, combined with relational practices such as fairness, loyalty, and seeking out responsive, dependable, and like‐minded suppliers.
Research limitations/implications
The study focuses exclusively on small manufacturing companies. Studies of other types of companies, such as trade or hi‐tech companies might reveal other practices.
Practical implications
The SCO supply risk management approach is optimised to simultaneously reduce supply risks and resource and time consumption. Especially the relational practices may be feasible alternatives and valuable to supply chain managers and purchasers. Local sourcing and knowledge protection are effective practices, but tend to work at the expense of supply chain opportunities.
Originality/value
No studies of small company supply risk management exist in the literature, despite the increased focus on supply risk management and small company purchasing/SCM. The study addresses this gap by offering insights into small company supply risk management practices.
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Romzie Rosman and Abdul Rahim Abdul Rahman
The purpose of this study is to examine the nature of the risk management practices of Islamic banks as recommended by the Islamic Financial Services Board (IFSB) in managing…
Abstract
Purpose
The purpose of this study is to examine the nature of the risk management practices of Islamic banks as recommended by the Islamic Financial Services Board (IFSB) in managing their unique risks. This study also explores the differences in risk management practices based on the country, size, type and age of the bank.
Design/methodology/approach
A questionnaire was developed to investigate the risk management practices. The main reference for the questionnaire was the IFSB Guiding Principles of Risk Management and the respondents were either the chief risk officers or holders of other senior positions involved in risk management in the Islamic banks. A non-parametric test was then conducted to explain the difference in mean scores for the unique risk management practices by the Islamic banks.
Findings
A lack of effective risk management practices was found in relation to liquidity risk, displaced commercial risk and equity investment risk by Islamic banks. However, Islamic banks were comparatively good in managing operational risk/Shari’ah non-compliance risk. The study found that there was a significant difference in the practice of equity investment risk management based on the size, type and age of the Islamic bank. In addition, a significant difference was found between the Islamic banks in the Middle Eastern and North African (MENA) and Asian countries concerning the practice of both displaced commercial risk and operational risk/Shari’ah non-compliance risk management.
Research limitations/implications
In spite of the limitations in non-parametric analysis, this analysis was preferred inasmuch as the data were measured on an ordinal scale with a small sample size.
Originality/value
This study is among the few studies that examine and explore the risk management practices of Islamic banks internationally by explaining the unique risks encountered in Islamic finance.
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The purpose of this paper is to investigate the interplay between risk management and uncertainty and the contextual variability of risk management practice. More precisely, the…
Abstract
Purpose
The purpose of this paper is to investigate the interplay between risk management and uncertainty and the contextual variability of risk management practice. More precisely, the research empirically measures the relation between the extent of use of risk management and the level of project uncertainty.
Design/methodology/approach
The research defines risk management from an empirical perspective., i.e. from an empirically‐identified set of tools that is actually used to perform risk management. This toolset is derived from the results of an ongoing major worldwide survey on what experienced practitioners actually do to manage their projects. This paper directly relates uncertainty to the degree of project definition. It uses a sample of 1,296 responses for which the interplay between risk management and uncertainty could be measured.
Findings
The results are very coherent. They verify and empirically validate many of the propositions drawn from a review of the literature. But results challenge some of the propositions found in the conventional project management literature and some commonly held views. The research shows that the use of risk management practices and tools is negatively related to the degree of project uncertainty. This somewhat counter‐intuitive result is consistent with a general tendency for all project management tools and techniques to be used more intensively in better defined contexts.
Practical implications
The empirical investigation of actual risk practices and their contextual variability can help better understand risk management practice and manage risks better. The research also clarifies the concepts of uncertainty, risk and risk management.
Originality/value
The results confirm some well‐known assumptions about practices, but at the same time produced unexpected results that can stimulate the development of new practices adapted to highly uncertain contexts. The project management field needs to develop new responses for specific contexts for which it was not primarily developed. The results of this research point in the direction of such a need for ill‐defined projects and highly uncertain contexts.
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This study investigates firm attributes (namely level of capitalisation, scope of operation, organisational structure, organisational lifecycle, systemic importance and size…
Abstract
Purpose
This study investigates firm attributes (namely level of capitalisation, scope of operation, organisational structure, organisational lifecycle, systemic importance and size) affecting the robustness of enterprise risk management (ERM) practice, the extent to which ERM affects the performance of banks and the impact of ERM on the long-term sustainability of banks in Nigeria. This was against the backdrop that the 2012 banking reform was a major regulatory intervention that mainstreamed ERM in the Nigerian banking sector.
Design/methodology/approach
The study employed a mixed methodology of content, trend and quantitative analyses. Ex post facto research design was deployed to analyse performance differential of banks, with respect to the implementation of ERM, over a 10-year period (2008–2017). A disclosure checklist developed from the COSO ERM integrated framework was used to assess the robustness of ERM by content-analysing divulgence on risk management in published annual reports. The banking reform periods were dichotomised into pre- (2008–2012) and post- (2013–2017) reform periods. Jonckheere–Terpstra test, independent sample t-test and Mann–Whitney test were applied to analyse a total of 1,036 firm-year observations over the period 2008–2017.
Findings
Result shows that bank attributes significantly affecting the robustness of risk management practice are level of capitalisation, scope of operation, systemic importance and size. Performance of banks improved slightly during the post-2012 banking reform period. This suggests that as banks consolidate on the gains of ERM, benefits of the regulatory policy on risk management may be realised in the long run. Result also shows that ERM enhances long-term performance, connoting that effective risk management could serve as a competitive strategy for surviving turbulence that typically characterises the banking sector.
Practical implications
The emergence of level of capitalisation, scope of operation, systemic importance and size as determinants of ERM provides empirical evidence to support the practice of reviewing the capital requirements for banking business from time to time by regulatory authorities (i.e. recapitalisation policy) as a strategy for managing systemic risk. Top management of banks may consider instituting mechanisms that will ensure risk management is given prominence. A proactive approach must be taken to convert risks to opportunities by banks and other financial institutions, going forward, to cope with the vicissitudes of financial intermediation.
Originality/value
The originality of the study stems from the consideration that it provides some new insights into the impact of ERM on banks long-term sustainability in a developing country. The study also contributes to knowledge by exposing the factors determining the robustness of risk management practice. The study developed a checklist for assessing ERM practice from annual reports and other risk management disclosure documents. The paper also adds to the scarce literature on risk governance and risk management.
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Anita Meidell and Kjell Ove Røsok
Since the mid-1990s, enterprise risk management (ERM) has proliferated in both the private and public sector as a holistic, enterprise-wide approach to risk management. In this…
Abstract
Since the mid-1990s, enterprise risk management (ERM) has proliferated in both the private and public sector as a holistic, enterprise-wide approach to risk management. In this chapter, we begin by exploring the economic, regulatory and professional context of ERM practices in Norway. To gain an understanding of the current state of ERM practices among Norwegian entities, we have conducted a survey among members of the Institute of Internal Auditors (IIA) Norway. Based on the survey data, we go on to analyse the perceived maturity of risk management practices of the surveyed organizations, as well as their integration of risk management with governance mechanisms and accounting practices. Four main findings emerged from the survey. We firstly observed that a majority of the respondents perceived that they had implemented ERM. Secondly, the average maturity of risk management practice is at a medium level, with ambitions to improve it further in the future. We further observed that a majority of the organizations have established risk management governance structures regarding the roles of risk management. However, there is still work to be done in relation to risk management functions in order for them to gain more attention and influence in the organizations. Finally, we find that risk management is more integrated with reporting processes than with strategic and performance planning processes, suggesting a more reactive than proactive approach to managing risks.
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Anna Maria E. Mendoza, Vivien T. Supangco and Maria Teresa B. Tolosa
This exploratory study attempted to determine the level of formalization and implementation of corporate governance and risk management practices, and the role of human resource…
Abstract
This exploratory study attempted to determine the level of formalization and implementation of corporate governance and risk management practices, and the role of human resource management in the design and formulation of such practices. This study also attempted to derive some patterns of association among the variables studied, including the degree to which specific human resource management practices were linked with the overall corporate governance and risk management objectives. Human resource management was consulted from time to time during the formulation of strategic plan, the design of behavioral control mechanisms, and the development of risk management guidelines and formal corporate culture programs. However, it was consulted only during implementation of corporate governance structures at the board level. Generally, human resource management involvement in the formulation of corporate governance and risk management mechanisms was related to the degree of formalization and implementation of such mechanisms, but not to the degree of congruence of human resource management functions with corporate governance and risk management objectives. However, the degree of formalization and implementation of corporate governance structures at the board level was related to the degree of congruence of human resource management functions with corporate governance and risk management objectives and the driver measures of performance. The latter was likewise related to mechanisms of behavioral control.
Kari Sippola, Jukka Pellinen, Antti Rautiainen, Toni Mättö and Vesa Voutilainen
This study aims to explore the formation of municipal risk management (RM) and the reasons for the differences of RM practices between the seven biggest cities in Finland.
Abstract
Purpose
This study aims to explore the formation of municipal risk management (RM) and the reasons for the differences of RM practices between the seven biggest cities in Finland.
Design/methodology/approach
The empirical data of this comparative qualitative case study comprises 33 interviews conducted with municipal managers. Supplementary material includes documentary material on municipal rules governing RM as well as annual reports and risk tools used in the municipalities.
Findings
This study found differences in cities with respect to when, how and why RM practices had evolved. The results indicate that differences in RM practices and development paths between cities are largely explained by the differences in the original reason to initiate RM, time span since its introduction, professional and educational backgrounds of risk managers, local risk events and accounting infrastructure such as RM tools developed in a city. These findings also suggest that even within the same municipality, different functions can be at different phases regarding RM.
Originality/value
This study reports on RM as a new form of accounting in the field of Finnish municipalities. This highlights how fairly uniform considerations at the field level lead to variation in the elaboration of RM practices at the municipal level. The study finds that different paths in the development of local RM involve iterative evolution between the phases of emergence, largely explained by contextual differences. This study contributes to understanding the emergence of new accounting forms in a municipal RM context.
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