Analysis of the effect of corporate governance attributes on risk management practices
Open Access
- 12 March 2018
- journal article
- Published by Virtus Interpress in Risk Governance and Control: Financial Markets & Institutions
- Vol. 8 (1), 14-23
- https://doi.org/10.22495/rgcv8i1art2
Abstract
Despite recent increased risk research attention being focussed on the Canadian and international scene, there are few research studies that specifically address the relation between corporate governance systems and risk management practices. This paper examines the relation between corporate governance systems and enterprise risk management. More specifically, we analyze how corporate governance attributes and particularly board characteristics can affect risk management practices in the context of Canadian listed companies. Using a content analysis approach, the level of exposure to risk in terms of likelihood, the consequences of such risk and the strategies for managing that risk were identified for each type of risk. The results reveal that corporate governance attributes related to board’s structure, directors’ characteristics and the board’s operating process play a significant and important role in establishing an integrative risk management approach. The results show that directors’ characteristics and the board’s process significantly determine the quality of risk management through the level of risk-taking in decisions, especially in terms of financial risks.Keywords
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