Abstract:
In recent years, Risk Management in respect of Enterprise-Wide Risk Management (EWRM) has become more important and highly critical to major corporations worldwide including Malaysia. In fact, it is interesting to note that when the Government of Malaysia passed the Code of Corporate Governance in the year 2000, most of the Public Limited Companies (PLCs) in Malaysia was struggling to implement the Risk Management program for their respective companies. The Malaysian Code of Corporate Governance (MCCG) actually holds the Board of Directors of these companies responsible to manage risks related to their businesses. Today, it is rather convincing to note that many of these companies have gradually moved from the Traditional Risk Management (TRM) approach to an Integrated Risk Management approach namely, Enterprise-Wide Risk Management (EWRM). The main objectives of this scholarly study are two-fold: (a) to examine the extent of EWRM practices by these PLCs and (b) to examine how EWRM could possibly enhance the overall economic value of these companies.This particular study incorporated an industry survey which included personal interviews with the Risk Managers or Chief Risk Officers (CROs) of twenty (20) PLCs under the Malaysian Bourse (previously known as the Kuala Lumpur Stock Exchange). These companies were selected based on the extensiveness of EWRM program undertaken. It must be mentioned that this study is the first study of its kind in Malaysia. Thus, the findings would undoubtedly provide an important insight into the EWRM practices within the industry concerned in terms of how EWRM actually contributed to the84 Mohd Rasid Hussin , Ahmad Shukri Yazid and Ahmad Rizal Razalioverall enhancement of economic value within the business enterprises of Malaysia.
Machine summary:
Thus, the findings would undoubtedly provide an important insight into the EWRM practices within the industry concerned in terms of how EWRM actually contributed to the84 Mohd Rasid Hussin , Ahmad Shukri Yazid and Ahmad Rizal Razali overall enhancement of economic value within the business enterprises of Malaysia.
Among the various types of risk exposures include the ability of business enterprises especially to improve company returns through value-based management (Hoyt & Liebenberg, 2006).
Thus, it is important to note that companies and organizations with a wide range of investment opportunities are likely to benefit from being able to select investments based on a more accurate risk-adjusted rate application of EWRM compared to what was available under the TRM approach (Hoyt & Liebenberg, 2006).
It provides a true account of the company’s structure and organization (such as the nature of business, annual turnover and Risk Management approach) in order to create value to the business entities • Personal interviews Industry surveys which include personal interviews were conducted based on the twenty (20) companies selected.
Findings showed that the respondents on the whole agree that EWRM as a value-added tool does contribute to the enhancement of economic value of their business enterprises in the following ways: • There was commitment and transparency from the top management • The top management drives toward a more systematic management of risks • Executive leadership and support were more visible • There was a positive move to develop competency within the entire entity • A serious attention on education and training of staff on risk management • Culture-creation towards a risk-conscious society within the entity concerned 3.