An Analysis of the Impact of Enterprise Risk Management (ERM) on the Firm Performance of Indonesia State-Owned Enterprises

Dinda Amalia Candela () and Machmudin Eka Prasetya ()
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Dinda Amalia Candela: Universitas Indonesia, Indonesia
Machmudin Eka Prasetya: Universitas Indonesia, Indonesia

Management and Economics Review, 2025, vol. 10, issue 2, 503-516

Abstract: This study aims to determine the impact of enterprise risk management (ERM) on company performance in Indonesia’s state-owned enterprises (SOE). This study took a sample of 40 Indonesia SOEs from 2021-2023, with 100 observations. The ERM aspects consist of the Directors of Risk Management, Risk Management Committee, Reporting between Directors to the Risk Management Committee, Risk Assessment, Risk Management Framework, and Risk Management Maturity. At the same time, Company performance is measured by Return on Assets (ROA). Hypothesis testing was carried out using the Ordinary Least Square method, and it showed that the Directors of Risk Management aspect had a significant positive effect on ROA. The Risk Management Committee aspect, reporting between Directors to the Risk Management Committee, Risk Assessment, and Risk Management Framework had no significant effect on ROA. In contrast, the overall implementation of ERM, as measured by RMI, had a significant positive effect on ROA.

Keywords: enterprise risk management; risk maturity index; firm performance; state-owned enterprise. (search for similar items in EconPapers)
JEL-codes: M41 M48 M49 (search for similar items in EconPapers)
Date: 2025
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