Managers’ Support – A Key Driver behind Enterprise Risk Management Maturity

Danijela Miloš Sprèiæ Antonija Kožul Ena Pecina
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Danijela Miloš Sprèiæ Antonija Kožul Ena Pecina: University of Zagreb, Faculty of Economics & Business, Zagreb, Croatia McKinsey & Company - Global management consulting, Zagreb, Croatia University of Zagreb, Faculty of Economics & Business, Zagreb, Croatia

Zagreb International Review of Economics and Business, 2017, vol. 20, issue SCI, 25-39

Abstract: Severe consequences of the global financial crisis resulted in re-thinking the risk management processes and approaches, highlighting the need for a comprehensive risk management framework. Consequently, more and more companies are moving away from the Traditional “silo-based” Risk Management (TRM) to a more holistic approach known as Enterprise Risk Management (ERM). This paper presents results of both exploratory and empirical research. First, we develop ERM Index that measures maturity of ERM process within the company. Then, we present empirical results on the level of maturity and determinants of risk management system development in listed Croatian companies. Research indicates low levels of ERM development: even 38 per cent of analysed companies have no elements of ERM system, from which 22 per cent do not manage corporate risks at all. Except the company’s size supported by the economies of scale argument, managers’ support is the most important determinant of ERM system maturity in Croatian companies. JEL Classification: G320, G340

Keywords: Enterprise Risk Management; ERM index; determinants of ERM; Croatian listed companies (search for similar items in EconPapers)
Date: 2017
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