The Role of Quality Board of Directors in Enterprise Risk Management (ERM) Practices: Evidence from Binary Logistic Regression
The purpose of this research is to examine the factors associated with the level of adoption of Enterprise Risk Management (ERM) among public listed companies in Malaysia. The aim of this particular study is to examine the relationship between the quality of Board of Directors (BOD) with regard to the level of ERM adoption within the companies involved. Binary Logistic Regression was conducted to test the hypothesis on surveyed firms selected from the seven industries listed on the main board of Malaysia Bourse. The specific research questions are: What is the level of ERM adoption among the Malaysian public listed companies?, Will quality of Board of Directors affect the level of adoption of ERM of Malaysian public listed companies? An interesting finding from this study is the positive correlation between the quality of BOD on the level of ERM adoption. This study will be able to shed some insights into the ERM activities of multinationals from a developing country’s perspective by identifying the level of stages that Malaysian public listed companies are adopting ERM. Studies of the management of Enterprise Risk by multinationals from developing countries, including Malaysia meanwhile, have been scarce. This research aims to fill this research gap by analysing the management of risks in Malaysian multinationals, with a special focus on ERM.