Title: Risk governance and firm value: exploring the hierarchical regression method

Authors: Olayinka Erin; Foluso Aribaba

Addresses: Department of Accounting, Covenant University, Nigeria ' Department of Accounting, Federal University of Oye Ekiti, Nigeria

Abstract: This study examines the impact of risk governance on firm value of 50 listed firms in the Nigerian financial institutions for the period of five years (2013-2017). The study provides empirical evidence which shows that risk governance variables (enterprise risk management index, chief risk officer presence, board risk committee size, board risk committee activism, and board risk committee independence) have a positive and significant impact on firm value. Similarly, firm attribute variables (firm size and firm age) have a significant positive impact on firm value while on the contrary corporate governance variables (board size and board of directors independence) show a negative but a significant impact on firm value. The empirical evidence observed in this study reveals that the institutionalisation of risk culture, strong risk oversight functions and increase in risk accountability by the board have greater tendency to enhance the value of a firm. This study contributes to the growing literature in the area of corporate reporting, risk governance and risk management research in Africa.

Keywords: board risk committee; chief risk officer; CRO; firm value; Nigerian financial institutions; risk governance; Tobin's Q.

DOI: 10.1504/AAJFA.2021.111809

Afro-Asian Journal of Finance and Accounting, 2021 Vol.11 No.1, pp.104 - 130

Received: 11 Apr 2019
Accepted: 15 Dec 2019
Published online: 15 Dec 2020 *

Full-text access for editors Full-text access for subscribers Purchase this article Comment on this article