An Exploratory Study of Enterprise Risk Management Pillars of ERM
(2014) In Journal of Accounting, Auditing & Finance 29(3). p.393-429- Abstract
- There is a general consensus that enterprise risk management’s (ERM) popularity has resulted from a response to pressure on organizations to holistically manage risk. Multiple frameworks for implementation of ERM contribute to an overall uncertainty regarding the essential components of ERM. This uncertainty carries forward to empirical studies of ERM where results regarding value creation are inconclusive. There exists no real consensus about what the principal components of ERM are; this has led to identification and measurement methods that are inconsistent. By using inconsistent indicators and measures of ERM implementation, it is impossible to compare “apples to apples” and arrive at conclusive and convincing results regarding ERM’s... (More)
- There is a general consensus that enterprise risk management’s (ERM) popularity has resulted from a response to pressure on organizations to holistically manage risk. Multiple frameworks for implementation of ERM contribute to an overall uncertainty regarding the essential components of ERM. This uncertainty carries forward to empirical studies of ERM where results regarding value creation are inconclusive. There exists no real consensus about what the principal components of ERM are; this has led to identification and measurement methods that are inconsistent. By using inconsistent indicators and measures of ERM implementation, it is impossible to compare “apples to apples” and arrive at conclusive and convincing results regarding ERM’s ability to create value. This is an exploratory study of ERM aimed at determining the integral components of ERM based on how firms actually implement ERM dimensions. The result is the identification of four discrete components, or pillars, of ERM implementation; two prerequisite components related to the general internal environment and control activities of the firm, one component identifying risk management activities of the firm and one component with the defining attributes of ERM implementation. All four components must be implemented to have well-implemented ERM, but only one separates ERM firms from non-ERM firms. The resulting four components challenge existing frameworks to adapt to better reflect how firms implement ERM and can have a valuable impact on identifying and measuring ERM, leading to more informative empirical studies on the value creating abilities of ERM. (Less)
Please use this url to cite or link to this publication:
https://lup.lub.lu.se/record/5051682
- author
- Lundqvist, Sara LU
- organization
- publishing date
- 2014
- type
- Contribution to journal
- publication status
- published
- subject
- keywords
- enterprise risk management, holistic risk management, exploratory factor analysis, risk management
- in
- Journal of Accounting, Auditing & Finance
- volume
- 29
- issue
- 3
- pages
- 393 - 429
- publisher
- SAGE Publications
- external identifiers
-
- scopus:84925306791
- ISSN
- 2160-4061
- DOI
- 10.1177/0148558X14535780
- language
- English
- LU publication?
- yes
- id
- 87bcf483-2cd8-4d12-af92-7879199a765c (old id 5051682)
- date added to LUP
- 2016-04-01 14:01:49
- date last changed
- 2022-03-29 18:50:27
@article{87bcf483-2cd8-4d12-af92-7879199a765c,
abstract = {{There is a general consensus that enterprise risk management’s (ERM) popularity has resulted from a response to pressure on organizations to holistically manage risk. Multiple frameworks for implementation of ERM contribute to an overall uncertainty regarding the essential components of ERM. This uncertainty carries forward to empirical studies of ERM where results regarding value creation are inconclusive. There exists no real consensus about what the principal components of ERM are; this has led to identification and measurement methods that are inconsistent. By using inconsistent indicators and measures of ERM implementation, it is impossible to compare “apples to apples” and arrive at conclusive and convincing results regarding ERM’s ability to create value. This is an exploratory study of ERM aimed at determining the integral components of ERM based on how firms actually implement ERM dimensions. The result is the identification of four discrete components, or pillars, of ERM implementation; two prerequisite components related to the general internal environment and control activities of the firm, one component identifying risk management activities of the firm and one component with the defining attributes of ERM implementation. All four components must be implemented to have well-implemented ERM, but only one separates ERM firms from non-ERM firms. The resulting four components challenge existing frameworks to adapt to better reflect how firms implement ERM and can have a valuable impact on identifying and measuring ERM, leading to more informative empirical studies on the value creating abilities of ERM.}},
author = {{Lundqvist, Sara}},
issn = {{2160-4061}},
keywords = {{enterprise risk management; holistic risk management; exploratory factor analysis; risk management}},
language = {{eng}},
number = {{3}},
pages = {{393--429}},
publisher = {{SAGE Publications}},
series = {{Journal of Accounting, Auditing & Finance}},
title = {{An Exploratory Study of Enterprise Risk Management Pillars of ERM}},
url = {{http://dx.doi.org/10.1177/0148558X14535780}},
doi = {{10.1177/0148558X14535780}},
volume = {{29}},
year = {{2014}},
}