Effect of corporate risk management disclosure on financial performance of non-financial service firms listed at Nairobi Securities Exchange, Kenya

The complex problem of risk factors has greatly increased globally due to the quick ever-changing digital era. The development of suitable techniques for facilitating the performance of risk management in the financial service domain is thus an urgent task, especially in today’s highly turbulent business environment. The development of such techniques involves many factors like the classical multiple criteria decision-making (MCDM) problem, but too many factors surrounding the users will confuse them and lead to improper judgments. To deal with this critical task, this study proposes a fusion multiple rule-based decision-making (MRDM) approach that integrates a rule-based technique [i.e., the fuzzy rough set theory (FRST) with particle swarm optimization (PSO)] into MCDM (i.e., DEMATEL, DANP, and modified-VIKOR) techniques that can help decision makers choose the optimal model necessary for achieving aspiration-level effects in a risk control strategy. The results indicate that the improvement priority, which runs in the order as (a) AI algorithm model, (c) AI regulatory and compliance, (d) AI conduct, and (b) AI technology based on the magnitude of the impact, can effectively improve the performance of AI-driven risk management for financial service firms.

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Modeling the Impact of Corporate Risk Management on Firms’ Financial Performance and Sustainable Growth

Studies of Applied Economics ◽

10.25115/eea.v40i1.4738 ◽

2022 ◽

Vol 40 (1) ◽

Author(s):

Tanveer Bagh ◽

Mirza Muhammad Naseer ◽

Muhammad Asif Khan

Keyword(s):

Risk Management ◽

Financial Performance ◽

Positive Impact ◽

Developed Countries ◽

Business Environment ◽

Sustainable Growth ◽

Global Business ◽

Corporate Risk Management ◽

Corporate Risk ◽

The Impact

Growing complexities in the indigence and global business environment, the demand for Corporate Risk Management (CRM) has fostered greatly. Equally, Financial Performance (FP) and Sustainable Growth Rate (SGR) are believed to be vital parameters for assessing any organisation's success. Both FP and SGR are get affected by different risks. Therefore, to the best of our knowledge, this paper is the first endeavour meant to empirically shed light on the Impact of CRM on a firm’s FP and SGR. By taking a sample of 160 listed Non-Financial firms from emerging and developed Countries stocks markets, on the bases of market capitalization, covering a period of 12 years (2007-2018). The CRM index has been constructed by using the Principal Component Analysis technique. Panel data fixed-effect Model applied on the bases of Hausman test. The results articulated that CRM has a significant and positive impact on ROE and SGR in the context of both cases. In contrast, inflation negatively relates to both scenarios, but the size and Gross Domestic Product (GDP) have a positive and significant relationship with ROE and SGR. However, in Pakistan's case, Size and GDP have articulated adverse effect on ROE and SGR.

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Do agency conflicts between managers and shareholders affect corporate risk management and financial performance of Saudi firms?

Journal of Investment Compliance ◽

10.1108/joic-11-2020-0044 ◽

2021 ◽

Vol ahead-of-print (ahead-of-print) ◽

Author(s):

Lamia Jamel ◽

Hanadi Eid Albogami ◽

Mazen Abduljahn Abdulaal ◽

Nuha Ahmed Aljohani

Keyword(s):

Risk Management ◽

Financial Performance ◽

Conflicts Of Interest ◽

Stock Exchange ◽

Risk Level ◽

Agency Conflicts ◽

Corporate Risk Management ◽

Content Type ◽

Corporate Risk ◽

The Impact

Purpose The purpose of this paper is to examine the impact of agency conflicts between managers and shareholders on corporate risk management and financial performance of Saudi firms listed in the Saudi Stock Exchange Tadawul. Design/methodology/approach To investigate the effect of agency conflicts between managers and shareholders on corporate risk management and financial performance, we use a sample of 180 Saudi firms listed in the Saudi Stock Exchange Tadawul during the period from 2009 to 2018. Econometrically, we employ Vector Autoregressive (VAR) and General Linear Model (GLM) techniques as an appropriate methodology. Findings Our findings show that the risk level of the last year increase the corporate risk management and the performance of Saudi firm. We remark that the separation amongst control and ownership generates agency conflicts amongst managers and shareholders which can affect their behavior in decision-making and performance of the Saudi firms. Thus, the conflicts of interest arise from the differences among the work horizon, the risk assumed, the performance of enterprises, and the level of remuneration desired by the managers and shareholders in the case of Saudi firms. Originality/value The main contributions of our paper prove that the deepen the study of agency costs linked to a shareholding structure through the analysis of monitoring, obligation, and opportunity costs in the Saudi firms.

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