Journal of Operational Risk
ISSN:
1755-2710 (online)
Editor-in-chief: Marcelo Cruz
Determinants of enterprise risk management implementation: evidence from multinational corporations across the three lines of defense
Need to know
- This study identifies six significant factors and one non-significant factor influencing enterprise risk management implementation (ERMI) in multinational corporations.
- The model demonstrates strong predictive power (R² = 75.40%) and emphasizes the critical role of leadership, frameworks, controls, and communication in strengthening ERM.
- To improve ERMI maturity and governance clarity we recommend engagement of leadership and stakeholders, customized frameworks, enhanced communication, readiness assessments, and board-level oversight.
Abstract
Enterprise risk management (ERM) is frequently regarded as an effective tool to handle interrelated risks in an environment of increased risk complexity. This empirical study on ERM examines various ERM factors from many fields, in particular those that influence ERM implementation. A systematic literature review of 151 articles from international peer reviewed journals was carried out. In a pilot study and subsequent analysis, ADANCO 2.2.1 was used as a statistical tool to examine 309 survey responses across three lines of defense in multinational corporations. The findings deepen understanding of the influencing factors in the acceptance of ERM among ERM implementers, senior executives and boards of directors, which is useful to organizations that have begun ERM deployment. The study catalogues these key factors and proposes a conceptual model for its implementation, making a strong case for ERM adoption by firms.
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