Do ownership structures affect the establishment of a risk management committee? Evidence from an emerging market
AbstractThe main aim of this paper is to examine the determinants that contribute to the establishment of a risk management committee (RMC) in a firm. Unlike previous studies, this paper investigates the types of ownership structure, comprising family, institutional, government, managerial, and fore...
| Main Authors: | , , , |
|---|---|
| Format: | Article |
| Language: | English |
| Published: |
Taylor & Francis Group
2023-12-01
|
| Series: | Cogent Business & Management |
| Subjects: | |
| Online Access: | https://www.tandfonline.com/doi/10.1080/23311975.2023.2244216 |
| _version_ | 1797265250580430848 |
|---|---|
| author | Masturah Malik Rohami Shafie Ku nor Izah Ku Ismail Anas Rasheed Bajary |
| author_facet | Masturah Malik Rohami Shafie Ku nor Izah Ku Ismail Anas Rasheed Bajary |
| author_sort | Masturah Malik |
| collection | DOAJ |
| description | AbstractThe main aim of this paper is to examine the determinants that contribute to the establishment of a risk management committee (RMC) in a firm. Unlike previous studies, this paper investigates the types of ownership structure, comprising family, institutional, government, managerial, and foreign ownership, as the factor that leads to the establishment of an RMC. This is based on the observation of 2,173 non-financial public listed firms from 2015 until 2017 in the Malaysian business market. By using logistic regression, the results depict that government and foreign ownership are significantly and positively related to the establishment of an RMC. In contrast, the establishment of an RMC in family and managerial ownership firms shows a negatively significant effect. The results indicate that family and managerial ownership have less of an agency problem in the firm, thus requiring less monitoring as compared to other types of ownership, which require more monitoring, especially in terms of managing risks, which affirm the argument of the agency theory. As a result, this study provides empirical evidence on the determinants of the establishment of RMCs and informs regulators and policymakers about the potential requirement for RMC establishment in Malaysian non-financial publicly traded firms. |
| first_indexed | 2024-03-07T14:19:24Z |
| format | Article |
| id | doaj.art-77c240c3117e49cdbc38241ffa2dad03 |
| institution | Directory Open Access Journal |
| issn | 2331-1975 |
| language | English |
| last_indexed | 2024-04-25T00:41:49Z |
| publishDate | 2023-12-01 |
| publisher | Taylor & Francis Group |
| record_format | Article |
| series | Cogent Business & Management |
| spelling | doaj.art-77c240c3117e49cdbc38241ffa2dad032024-03-12T08:30:26ZengTaylor & Francis GroupCogent Business & Management2331-19752023-12-0110210.1080/23311975.2023.2244216Do ownership structures affect the establishment of a risk management committee? Evidence from an emerging marketMasturah Malik0Rohami Shafie1Ku nor Izah Ku Ismail2Anas Rasheed Bajary3Tunku Puteri Intan Safinaz School of Accountancy (TISSA-UUM), Universiti Utara Malaysia, Sintok, MalaysiaTunku Puteri Intan Safinaz School of Accountancy (TISSA-UUM), Universiti Utara Malaysia, Sintok, MalaysiaTunku Puteri Intan Safinaz School of Accountancy (TISSA-UUM), Universiti Utara Malaysia, Sintok, MalaysiaTunku Puteri Intan Safinaz School of Accountancy (TISSA-UUM), Universiti Utara Malaysia, Sintok, MalaysiaAbstractThe main aim of this paper is to examine the determinants that contribute to the establishment of a risk management committee (RMC) in a firm. Unlike previous studies, this paper investigates the types of ownership structure, comprising family, institutional, government, managerial, and foreign ownership, as the factor that leads to the establishment of an RMC. This is based on the observation of 2,173 non-financial public listed firms from 2015 until 2017 in the Malaysian business market. By using logistic regression, the results depict that government and foreign ownership are significantly and positively related to the establishment of an RMC. In contrast, the establishment of an RMC in family and managerial ownership firms shows a negatively significant effect. The results indicate that family and managerial ownership have less of an agency problem in the firm, thus requiring less monitoring as compared to other types of ownership, which require more monitoring, especially in terms of managing risks, which affirm the argument of the agency theory. As a result, this study provides empirical evidence on the determinants of the establishment of RMCs and informs regulators and policymakers about the potential requirement for RMC establishment in Malaysian non-financial publicly traded firms.https://www.tandfonline.com/doi/10.1080/23311975.2023.2244216risk management committee (RMC)ownership structureagency theoryrisk managementriskscorporate governance |
| spellingShingle | Masturah Malik Rohami Shafie Ku nor Izah Ku Ismail Anas Rasheed Bajary Do ownership structures affect the establishment of a risk management committee? Evidence from an emerging market Cogent Business & Management risk management committee (RMC) ownership structure agency theory risk management risks corporate governance |
| title | Do ownership structures affect the establishment of a risk management committee? Evidence from an emerging market |
| title_full | Do ownership structures affect the establishment of a risk management committee? Evidence from an emerging market |
| title_fullStr | Do ownership structures affect the establishment of a risk management committee? Evidence from an emerging market |
| title_full_unstemmed | Do ownership structures affect the establishment of a risk management committee? Evidence from an emerging market |
| title_short | Do ownership structures affect the establishment of a risk management committee? Evidence from an emerging market |
| title_sort | do ownership structures affect the establishment of a risk management committee evidence from an emerging market |
| topic | risk management committee (RMC) ownership structure agency theory risk management risks corporate governance |
| url | https://www.tandfonline.com/doi/10.1080/23311975.2023.2244216 |
| work_keys_str_mv | AT masturahmalik doownershipstructuresaffecttheestablishmentofariskmanagementcommitteeevidencefromanemergingmarket AT rohamishafie doownershipstructuresaffecttheestablishmentofariskmanagementcommitteeevidencefromanemergingmarket AT kunorizahkuismail doownershipstructuresaffecttheestablishmentofariskmanagementcommitteeevidencefromanemergingmarket AT anasrasheedbajary doownershipstructuresaffecttheestablishmentofariskmanagementcommitteeevidencefromanemergingmarket |