Open AccessEnterprise Risk Management and Risk Culture in Construction Public Listed Companies
Author(s) -
Ching Ching Wong,
Faizul Azli Mohd Rahim,
Siaw Chuing Loo
Publication year - 2021
Publication title -
journal of construction in developing countries
Language(s) - English
Resource type - Journals
eISSN - 1823-6499
pISSN - 2180-4222
DOI - 10.21315/jcdc2021.26.2.2
Subject(s) - enterprise risk management , risk management , risk appetite , business , it risk management , accountability , organizational culture , risk management framework , factor analysis of information risk , financial risk management , officer , construct (python library) , safety culture , risk analysis (engineering) , accounting , operations management , risk management information systems , public relations , finance , engineering , management , computer science , political science , management information systems , economics , electrical engineering , information system , law , programming language
Inadequate risk management and lack of risk culture can expose a company to unexpected risk events, which can negatively affect its performance. However, there are inconsistencies in suitable dimensions to measure the enterprise risk management (ERM) construct, as well as insufficient embedding strategies for risk culture. This study aims to identify the ERM practices and risk culture dimensions among the Malaysian construction public listed companies (PLCs). The roles of top management and chief risk officer/risk manager in influencing ERM and risk culture are also explored. A total of 46 annual reports and 10 interviews of industry practitioners were analysed using content analysis. The analysis of the annual reports found that risk policy and risk appetite/tolerance, monitoring key risk and accountability are the three dimensions of risk culture. In addition, based on the interviews, reward and recognition and internal relationships were identified as the two dimensions of risk. Top management and risk manager were found to be the primary drivers of ERM programme and risk culture in construction PLCs. The results of this study are used to formulate a survey instrument for the subsequent data collection to test the proposed theoretical model.