approaches on correlation between board of directors and risk management in resilient economies

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ID: 216283
2017
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Abstract
The recent financial crisis highlighted the need for a strong emphasis on the effectiveness of board risk oversight practices. Good corporate governance upholds effective risk management, which in turn ensures the flexibility to reply to unpredicted threats and take benefit of opportunities. Thus, risk management affords corporate resilience that engenders competitive advantage due to the capacity to circumvent, deter, defend, react, and adjust to any kind of disturbance, besides recovering quickly. Guaranteeing that the board is prepared and adequately resilient to deal with a crisis circumstance is a crucial part of good governance. By employing a data set of companies listed in Romania, this paper analyzes whether boards of directors influence risk management. We measure boards by means of size, independence, diversity, establishment of Consultative Committees, as well as CEO duality, gender, age, and tenure. Based on ten financial ratios, we develop two risk indicators regarding shareholders’ wealth and short-term risk, alongside a global business failure risk tool, by means of principal component analysis. Furthermore, the output of the multivariate regression analysis show that CEO gender, the size of the board, and Audit Committee negatively influence business failure risk.
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armeanu2017sustainabilityapproaches Use this key to autocite in the manuscript while using SciMatic Manuscript Manager or Thesis Manager
Authors ;Daniel Ştefan Armeanu;Georgeta Vintilă;Ştefan Cristian Gherghina;Dan Cosmin Petrache
Journal journal of physics: conference series
Year 2017
DOI
10.3390/su9020173
URL
http://www.mdpi.com/2071-1050/9/2/173
Keywords
risk management resilience board of directors principal components analysis

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