The effect of Enterprise Risk Management on the risk and the performance of Spanish listed companies
Dublin Core
Title
The effect of Enterprise Risk Management on the risk and the performance of Spanish listed companies
Subject
ERM
Enterprise Risk Management
Risk
Performance
Enterprise Risk Management
Risk
Performance
Description
This paper evaluates the effect of nterpriseRiskManagement(ERM) onthe performance and thefinancial stability of a sample of non-financial Spanish listed companies. The information about ERM is taken from the annual reports, management reports and annual corporate governance reports disseminated over four years (2012−2015). The data on performance and financial stability have been obtained through the SABI (Iberian Balance Sheet Analysis System) and Morningstar Direct. The results obtained show
that the adoption of ERM is not associated with a change in the performance of Spanish companies (measured through the return on equity, return on assets and Tobin’s Q) nor does it reduce the probability of bankruptcy. Having a chief risk officer (CRO) can actually reduce performance, although it can improve the degree of financial health measured as the distance to default. Regarding the relationship between the hedging of risks on the profitability and the level of risk, we find evidence of improvement through
the hedging of exchange risk.
that the adoption of ERM is not associated with a change in the performance of Spanish companies (measured through the return on equity, return on assets and Tobin’s Q) nor does it reduce the probability of bankruptcy. Having a chief risk officer (CRO) can actually reduce performance, although it can improve the degree of financial health measured as the distance to default. Regarding the relationship between the hedging of risks on the profitability and the level of risk, we find evidence of improvement through
the hedging of exchange risk.
Creator
Luís Otero González, Pablo Durán Santomil , Aracely Tamayo Herrera
Source
https://www.sciencedirect.com/journal/european-research-on-management-and-business-economics/vol/26/issue/3
Publisher
Elsevier Espana, S.L.U
Date
24 September 2020
Contributor
Sri Wahyuni
Rights
ISSN: 2444-8834
Format
PDF
Language
English
Type
Text
Coverage
Jurnal Internasional European Research on Management and Business Economics 2020
Files
Collection
Citation
Luís Otero González, Pablo Durán Santomil , Aracely Tamayo Herrera, “The effect of Enterprise Risk Management on the risk and the performance of Spanish listed companies,” Repository Horizon University Indonesia, accessed February 6, 2025, https://repository.horizon.ac.id/items/show/6715.