Risk are impossible to be avoided and eliminated and without risk management, firms
may be threatened in many ways. Enterprise Risk Management (ERM) has emerged
from the “silo” approach as portfolio for firms in managing risks. The significant
growth of ERM implementation among Malaysian Public Listed Companies across the
year questioned how does the implementation provide benefit to the company
especially in measuring its performance. Despite the rising literature and studies
conducted for ERM, the extend of ERM implementation and firm performance are still
vague, especially when the measurement for ERM implementation always vary.
Conflicting views on how ERM affect the firm performance requires research to
provide on whether ERM does really affect firm performance or not. This study look
in details on how the adoption of ERM is associated with firm performance based on
basic risk management components, extracted from COSO (2004) integrated
frameworks based on its strategic objectives. The study also extends in determining
which components that significantly influences the firm performance. This study
measures ERM implementation based on the public companies that are listed under
Bursa Malaysia Main Market. A total of 137 public companies that are listed under
Main Market has participated in this study. Based on the data, the study finds that the
extent of ERM implementation does not significantly affect firm performance. The
researcher also found that there is no relationship between ERM and firm performance
but one of the ERM components; risk monitoring and reporting do significantly
influences firm performance.
