The Effect of Enterprise Risk Management on Bank Performance Evidence From Indonesia Publik Listed Companies

Agustin, Hamdi and Azwirman, Azwirman and Siska, Siska The Effect of Enterprise Risk Management on Bank Performance Evidence From Indonesia Publik Listed Companies. In: UBAYA INTERNATIONAL ANNUAL SYMPOSIUM ON MANAGEMENT.

Text 3. The Effects of Enterprise Risk Management on Bank Performance - Evidence from Indonesian Public Liste (1).pdf - Published Version Download (1MB)

Abstract

The purpose of this paper is investigate the effect of the Enterprise Risk Management implementation (ERM) on firm performance, mainly focusing on the bank industry. The population and the sample consist of 24 public listed banks, only 15 banks were selected to be the sample. The time period of the study was from 2011 to 2015, the data are taken from banks’ annual reports of fiscal year ends on December 31 of each year and the data set consists of 11 private banks and 4 government banks. In this study using panel data and using pooled ordinary least square (OLS) and random effect analysis. The results are surprised and controversial. We find a negative statistically significant effect between the ERM adaption and Tobin’s Q, while positive effect on Return On Equity of bank performance. This study also shows that DGOVERNMENT and DERM play a significant factor in explaining the performance in Indonesia banks.

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