Title:	Is enterprise risk management a value added activity?
Authors:	Marc, Mojca Sprčić, Danijela Miloš Žagar, Marina Mešin
Citation:	E+M. Ekonomie a Management = Economics and Management. 2018, roč. 21, č. 1, s. 68-84.
Issue Date:	2018
Publisher:	Technická univerzita v Liberci
Document type:	článek article
URI:	http://hdl.handle.net/11025/29478
ISSN:	2336-5604 (Online) 1212-3609 (Print)
Keywords:	řízení podnikových rizik;hodnotové ovladače;vytváření hodnot;neziskové společnosti
Keywords in different language:	enterprise risk management;value drivers;value creation;non-financial companies
Abstract in different language:	Enterprise risk management (ERM) programs are advocated as the solution for the failures and weaknesses of the traditional silo-based risk management in creating and protecting stakeholders’ value. ERM encompasses activities and strategies which enable the company to systematically identify, measure, reduce or exploit, as well as to control and monitor the exposure to various types of corporate risks – strategic, fi nancial, operational, reporting as well as compliance risks. By considering the interactive effects of different risk events, ERM offers a balance between the dual nature of risk – ensuring effective protection from threats and seizing the opportunities. This paper explores the association between ERM and a set of fundamental value determinants of S&P 500 non-fi nancial companies over the period from 2003 to 2012. Contrary to arguments found in the existing ERM literature, ERM companies did not experience a positive effect on most of the value drivers. We fi nd that ERM is associated with lower expected growth rates within one to two years after the ERM adoption, indicating that ERM could even have a negative effect on the company’s fundamental value. On the other hand, the study showed that ERM is associated with higher free cash fl ows after six years of its use. Our research thus found indicative evidence that ERM produces some positive effects over a longer term, as well as some negative immediate effects, which could be explained with the increased risk aversion of ERM companies. However, since the tested models are explorative in nature, more theoretical and empirical research is needed to establish how ERM really works within a company.
Rights:	CC BY-NC 4.0
Appears in Collections:	Číslo 1 (2018) Číslo 1 (2018)

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