企业风险管理与公司绩效外文翻译文献2020

外文文献翻译原文及译文标题：企业风险管理与公司绩效外文翻译中英文2020文献出处：Muhammad Farhan Malik, Mahbub Zaman, Sherrena Buckby. JJournal of Contemporary Accounting & Economics, Volume 16, Issue 1, April 2020, PP:1-22译文字数：4400多字英文Enterprise risk management and firm performance: Role of the risk committeeMuhammad Malik, Mahbub Zaman, Sherrena BuckbyAbstractIn recent years, there have been increasing efforts in the corporate world to invest in risk management and governance processes. In this paper, we examine the impact of Enterprise Risk Management (ERM) on firm performance by examining whether firm performance is strengthened or weakened by the establishment of a board-level risk committee (BLRC), an important governance mechanism that oversees ERM processes. Based on 260 observations from FTSE350 listed firms in the UK during 20122015, we find the effectiveness of ERM significantly and positively affects firm performance. We also find strong BLRC governance complements this relationship and increases the firm performance effects of ERM. Our findings suggest the mere formation of a BLRC is not a panacea for ERM oversight; however, existence of a structurally strong BLRC is crucial for effective ERM governance.Keywords: Enterprise risk management, Risk committee, Risk governance, Firm performanceIntroductionRecent events, including the corporate downfalls of the early 2000s and the Global Financial Crisis (GFC) of 200709, have led to increased international regulatory efforts to enhance risk management (RM) practices. In the UK, the Walker Report (2009) and guidelines from the Financial Reporting Council (FRC, 2011,FRC, 2014a,FRC, 2014b) suggest listed firms should adhere to sophisticated RM practices, including the creation of a holistic RM framework and greater involvement from boards of directors in risk governance. An increasing number of UK listed firms now adhere to these recommendations, which focus on the establishment of an Enterprise Risk Management (ERM)process and the establishment of a board-level risk committee (BLRC)to enhance the boards risk oversight function. This paper contributes to the literature on ERM by examining the impact of ERM on UK firm performance, particularly whether this relationship is strengthened or weakened by the adoption of a BLRC. To date, research investigating the roles and outcomes of a BLRC is scarce. This study focuses on evidence from UK listed firms to provide key insights into this emerging issue.Our study, motivated by key corporate governance guidelines, considers the impact of ERM process adoption (including the structural strength of BLRC) on firm performance in UK FTSE350 firms. We apply Tobins Q as our firm performance measure based on prior research (Baxter et al., 2013;Farrell and Gallagher, 2015,Hoyt and Liebenberg, 2011,Lin et al., 2012,McShane et al., 2011) and adopt theGordon et al. (2009)ERM index as a composite measure of the effectiveness of ERM processes. Previous studies measure the presence of ERM activity using a binary variable (Hoyt and Liebenberg, 2011,Lechner and Gatzert, 2018,Lin et al., 2012,Pagach and Warr, 2010). In contrast, theGordon et al. (2009)index reflects the presence of an ERM function in a firm and measures the effectiveness of ERM processes regarding business strategy, operations, reporting, and compliance (COSO, 2004). BLRC structural strength is measured using six dimensions related to its structure and composition, drawing on risk governance guidelines and prior research on the effectiveness/efficacy of board-level committees with a similar monitoring role to the BLRC (Goodwin and Seow, 2002,Xie et al., 2003,Zaman et al., 2011).Our empirical findings suggest ERM is positively associated with UK firm performance. The results suggest ERM is an efficient form of “internal” RM and if overseen by the BLRC should maximize shareholders wealth. The findings suggest a structurally strong BLRC (a committee with high levels of monitoring and diligence comprised of financial experts exhibiting gender diversity) strengthens ERM impact on firm performance. This implies BLRC adoption by itself is insufficient to achieve ERM oversight. However, BLRC structural strength is identified as necessary for effective ERM governance. As BLRC formation is an emerging ERM practice (Brown et al., 2009,Hines et al., 2015), our study addresses a gap in current RM literature by examining whether a BLRC strengthens or weakens the impact of ERM on firm performance providing an important contribution to the field.BackgroundIn the UK, theWalker (2009)report and FRC guidelines (FRC, 2011,FRC, 2014a,FRC, 2014b) recommend UK listed firms should adopt a holistic approach to ERM. The guidelines suggest UK listed firms adopt a multifaceted approach to risk identification and risk assessment, and consider all the principal risks faced by the entity. An effective RM infrastructure adopted and governed by a high-level risk governance structure (a BLRC) promotes a strong risk culture at all levels of the firm, approves enterprise risk strategy and risk appetite, and monitors organisational risk mitigation plans. Taken together, theFRC (2014b)suggests listed firms should adopt a robust and effective RM system to safeguard against major risks that could seriously affect organisational performance, future prospects, or damage firm reputation. As a result of the clear guidance provided for risk committees in the UK, our study focuses on revealing whether BLRCs in listed firms are found to be structurally sufficient to support the ERM oversight functions outlined in theWalker (2009)report. We are motivated to gather evidence of the relationship between ERM and firm performance using UK data for the following reasons. After the GFC, demand for firm-level risk oversight increased in the UK and internationally. TheWalker (2009)report contributed to this demand by encouraging the formation of a BLRC and driving the adoption of an ERM function in listed UK firms.In the US, theDodd-Frank Act (2010)also mandated similar requirements for US listed firms but did not provide the same level of detailed prescription regarding the role, responsibilities, and processes of a BLRC compared to UK regulations. Prior research has examined this relationship in US settings using various proxies for ERM. ERM research has not reached a consensus to date, with results indicating ERM is both value relevant (Gordon et al., 2009,Grace et al., 2015,McShane et al., 2011) and not value relevant (Beasley et al., 2008,Lin et al., 2012,Pagach and Warr, 2010). In Europe, two recent studies (Florio and Leoni, 2017,Lechner and Gatzert, 2018) find ERM is positively associated with firm performance. Due to this lack of consensus in the literature, we are motivated to examine the impact of ERM on firm performance using UK data to consider whether ERM is value relevant and whether it is associated with improved firm performance, especially when related to the adoption of a BLRC as an ERM governance mechanism.In a US based study,Gordon et al. (2009)propose the impact of ERM-driven firm performance is dependent upon the proper match between monitoring by the board4and ERM processes. They posit how participation and encouragement from the board is essential for effective ERM adoption, a perspective shared byKleffner et al., 2003,Sobel and Reding, 2004. Our study contributes by extending the findings ofGordon et al. (2009)across two dimensions. First, we recognise responsibility for ERM oversight is usually delegated to the BLRC, a sub-committee of the full board. Second, we examine how risk committee structural characteristics influence ERM effectiveness and consequently firm performance.Prior literature suggests a newly emerging BLRC generally assists the board in carrying out its ERM responsibilities, such as risk oversight, fostering risk culture, and improving the quality of risk monitoring and reporting (Aebi et al., 2012,Brown et al., 2009,COSO, 2004). RM literature in the UK provides evidence of risk reporting patterns in listed firms (Linsley and Shrives, 2005,Linsley and Shrives, 2006). However, the links between corporate governance and risk reporting (Abraham and Cox, 2007), and the effects of traditional RMon firm value (Panaretou, 2014), demonstrate there is a paucity of UK empirical evidence investigating the impact of ERM practices and the influence of a BLRC oversight on firm performance.Our paper contributes to international RM literature in the following ways. First, UK RM research focused on the incentives of risk reporting (Elshandidy et al., 2018).Our paper extends prior research by focusing on the informativenessof UK ERM practices (Baxter et al., 2013,Gordon et al., 2009,Florio and Leoni, 2017,Hoyt and Liebenberg, 2011,Lechner and Gatzert, 2018,Pagach and Warr, 2010). RM has received considerable attention from both professional and regulatory UK bodies, including improved RM guidelines from the FRC (FRC, 2011,FRC, 2014b).Panaretou (2014)examines the valuation impacts of derivative usage (a practice in financial RM) in UK firms and finds hedging practices are weakly or non-significantly associated with firm performance. We extend the study ofPanaretou (2014)by examining the valuation impacts of the effectiveness of ERM processes. Our study contributes to the literature examining the risk-related corporate governance mechanisms that affect firm performance (Aebi et al., 2012,Ames et al., 2018,Brown et al., 2009,Florio and Leoni, 2017,Tao and Hutchinson, 2013). Previous studies suggest the presence of a BLRC represents strong RM (Aebi et al., 2012), indicating greater levels of ERM implementation and integration of RM in corporate governance mechanisms (Florio and Leoni, 2017). We extend these studies by investigating the impact of six key structural characteristics of a BLRC on firm performance effects of ERM.Discussion and conclusionIn recent years, there have been increased efforts in the UK to improve risk governance mechanisms. In this paper, we investigate whether a firms RM, particularly ERM processes, is linked to firm performance. We also examine the interaction role of the BLRC, as a risk governance mechanism, in this relationship. We find effective ERM processes improve firm performance measured by Tobins Q, thus giving support to the theoretical claims by prior researchers regarding performance implications associated with the implementation of ERM (Baxter et al., 2013,Brown et al., 2009,Florio and Leoni, 2017,Gordon et al., 2009,Liebenberg and Hoyt, 2003,Nocco and Stulz, 2006). This result infers the higher the effectiveness of a firms ERM, the greater the ability of the firm to achieve its strategic objectives i.e. strategy, operations, reporting, and compliance (COSO, 2004). We find that a BLRC improves the ERM and firm performance relationship. In particular, the existence of a strong BLRC is essential for ERM processes to be effective enough to increase market performance.Our study contributes to the empirical research on RM and has clear practical implications. First, the results demonstrate ERM is positively related to firm performance, and the adoption of ERM processes is more attractive for UK firms who have not yet implemented ERM. However, adoption is not sufficient an effective ERM system needs to efficiently achieve organisational objectives and positively impact shareholders wealth creation. Unlike traditional silo-based RM, which is isolated, fragmented, and uncoordinated (task-by-task or department-by-department) with a focus solely on financial RM, the holistic approach of ERM incorporates and integrates decision-making at multiple levels and prevents risk aggregation within the organisation. By adopting an effective ERM, a firm can create value through: 1) strategy (by maximizing its market position relative to its competitors); 2) operations (by increasing operational efficiency); 3) reliable financial reporting system; and 4) compliance with applicable laws and regulations.COSO (2004)describes ERM best practice as including (but not be limited to) a holistic method of RM, standardization of risk measures, formalization of risk ownership at all levels of the organisation, engagement of all employees in RM processes, localization of risk culture, and assurance of proper recording, documentation and communication of risks and opportunities. We identify how adopting ERM practices in UK listed firms should more efficiently implement FRC guidelines on RM (FRC, 2011,FRC, 2014a,FRC, 2014b). Second, since ERM is a holistic approach embedded throughout the organisation, it provides a multifaceted platform for corporate governance when focusing on value maximization through RM. We find with regard to risk governance, the BLRC supports the function of ERM. Our results indicate the valuation outcomes of ERM are affected by the structure and composition of the BLRC.One of the key contributions of our study is how a structurally strong BLRC, larger in size, more active, and with higher independent, financial, female, and inter-committee directorships, supports a stronger ERM and firm performance relationship. Conversely, a weak BLRC could adversely affect this relationship and reduce the performance implications of ERM. Our study identifies that UK corporate regulatory bodies should introduce detailed guidelines in relation to BLRC formation and structure to promote better quality risk governance.Walker (2009)encourages firms to establish a BLRC and details their responsibilities, but does not stipulate clear guidelines on the committees structure and composition and interactions.Finally, our findings have international implications. SinceCOSO (2004)provides a globally accepted international level ERM framework (Florio and Leoni, 2017,Lechner and Gatzert, 2018), we suggest that to improve the effectiveness of ERM processes to meet a firms strategic objectives, it is crucial to improve firm performance implications. We expect the effectiveness of ERM processes supplements the important features of ERM identified by previous researchers, such as CRO appointment (Beasley et al., 2008), ERM ratings from external agencies (McShane et al., 2011), ERM program maturity (Farrell and Gallagher, 2015), and the level of ERM implementation (Florio and Leoni, 2017). In addition, as the adoption of BLRCs is increasing globally for the oversight of RM processes (Al-Hadi et al., 2016,Florio and Leoni, 2017,Hines and Peters, 2015,Ng et al., 2013,Tao and Hutchinson, 2013) we suggest structural balance of the BLRC is important for effective risk governance.As with all research, this study is not free from limitations. First, the small sample size limits the power of our analysis and generalizability of findings. As investments in RM and governance are continuing to increase; future researchers will be able to employ larger samples to extend this studys analysis and generalizations. Second, this study employs theGordon et al. (2009)ERM index to measure the ERM effectiveness of a firm. This index focuses on theCOSO (2004)framework and measures the strength of an ERM program, however, the index is unable to capture the maturity of the ERM program of a firm. Future studies could assist with developing a more sophisticated ERM index. Third, we ignore the independence of the ERM function. TheWalker (2009)report requires an independent CRO to participate in the BLRC and the risk oversight process ultimately be accountable to the full board. A future study could further examine the risk-reporting framework of UK firms in terms of CRO reporting, accountability, and efficiency of the ERM function and BLRC monitoring.中文企业风险管理与公司绩效：风险委员会的作用穆罕默德马利克马布卜扎曼谢雷娜巴克比摘要近年来，企业界在投资风险管理和治理流程方面做出了越来越多的努力。在本文中，我们通过研究建立董事会级风险委员会（BLRC）来加强或削弱公司绩效，从而检查企业风险管理（ERM）对公司绩效的影响，该委员会是监督ERM流程的重要治理机制。根据2012年至2015年英国FTSE350上市公司的260项观察，我们发现企业风险管理的有效性显着且对公司绩效产生积极影响。我们还发现强大的BLRC治理补充了这种关系，并增强了企业风险管理对公司绩效的影响。我们的发现表明，仅仅建立BLRC并不是企业风险管理监督的灵丹妙药。但是，结构上强大的BLRC的存在对于有效的企业风险治理至关重要。关键字：企业风险管理，风险委员会，风险治理，企业绩效引言最近发生的事件，包括2000年代初公司倒闭和2007-2009年度全球金融危机（GFC），导致国际监管机构加大了力度，以增强风险管理（RM）的作法。在英国，沃克报告（2009）和财务报告委员会的指导原则（FRC，2011，FRC，2014a，FRC，2014b）建议上市公司应遵循复杂的RM惯例，包括建立整体的RM框架和更多董事会参与风险治理。现在，越来越多的英国上市公司都遵守这些建议，这些建议的重点是建立企业风险管理（ERM）流程以及建立董事会级风险委员会（BLRC）以增强董事会的风险监督职能。本文通过检查企业风险管理对英国公司绩效的影响，特别是通过采用BLRC来加强或削弱这种关系，为有关企业风险管理的文献做出了贡献。迄今为止，缺乏研究BLRC的作用和结果的研究。这项研究的重点是来自英国上市公司的证据，以提供对这一新兴问题的关键见解。我们的研究受主要公司治理准则的推动，考虑了采用ERM流程（包括BLRC的结构实力）对英国FTSE350公司的公司绩效的影响。我们基于先前的研究（Baxter等人，2013; Farrell和Gallagher，2015; Hoyt和Liebenberg，2011; Lin等人，2012，McShane等人，2011）将Tobins Q用作我们的公司绩效指标，并采用戈登等（2009年）企业风险管理指数是企业风险管理流程有效性的综合衡量指标。先前的研究使用二元变量来衡量ERM活性的存在（Hoyt和Liebenberg，2011；Lechner和Gatzert，2018； Lin等人，2012； Pagach和Warr，2010）。相比之下，戈登等（2009年）指数反映了企业中企业风险管理功能的存在，并衡量了企业风险管理流程在业务战略，运营，报告和合规性方面的有效性（COSO，2004年）。 BLRC的结构强度是使用与其结构和构成相关的六个维度来衡量的，它借鉴了风险治理指南以及对与BLRC具有类似监督作用的董事会级别委员会的有效性/效率的先前研究（Goodwin和Seow，2002，Xie等，2003，Zaman等人，2011）。我们的实证研究表明，企业风险管理与英国公司绩效呈正相关。结果表明，企业风险管理是“内部”风险管理的一种有效形式，并且如果受到BLRC的监督，则可以最大限度地提高股东的财富。研究结果表明，结构上强大的BLRC（一个由具有性别差异的金融专家组成的具有高度监督和勤勉水平的委员会）可以增强企业风险管理对公司绩效的影响。这意味着BLRC本身的采用不足以实现对ERM的监督。但是，BLRC的结构强度被确定为有效的企业风险管理的必要条件。由于BLRC的形成是一种新兴的ERM实践（Brown等，2009； Hines等，2015），我们的研究通过检查BLRC是否增强或减弱了ERM对公司绩效的影响来解决当前RM文献中的空白。对这一领域的重要贡献。背景在英国，沃克（2009）报告和FRC准则（FRC，2011，FRC，2014a，FRC，2014b）建议英国上市公司应采用整体方法进行企业风险管理。该指南建议英国上市公司采用多方面的方法进行风险识别和风险评估，并考虑该实体面临的所有主要风险。由高层风险治理结构（BLRC）采纳和管理的有效RM基础结构可在公司的各个级别促进强大的风险文化，批准企业风险战略和风险偏好，并监控组织的风险缓解计划。综上所述，FRC（2014b）建议上市公司应采用强大而有效的风险管理系统，以防范可能严重影响组织绩效，未来前景或损害公司声誉的重大风险。由于为英国风险委员会提供了明确的指导，我们的研究重点在于揭示上市公司的BLRC是否在结构上足以支持Walker（2009）报告中概述的ERM监督职能。出于以下原因，我们有动机使用英国数据来收集企业风险管理与公司绩效之间关系的证据。在全球金融危机之后，英国和国际上对公司级风险监管的需求都在增加。 Walker（2009）的报告通过鼓励成立BLRC并推动在英国上市公司中采用ERM功能而满足了这一需求。在美国，多德-弗兰克法案（2010年）也对美国上市公司提出了类似要求，但与英国法规相比，该法律并未就BLRC的作用，职责和流程提供相同级别的详细规定。先前的研究已经