The Relationship between Enterprise Risk Management (ERM) and Organizational Performance
No Thumbnail Available
Date
2014
Authors
Obalola, M.A
Ime, T.A
Abass, O.A
Journal Title
Journal ISSN
Volume Title
Publisher
Research Journal of Finance and Accounting
Abstract
Modern business environment is embroiled with business risks which can have a negative impact on an organization existence and success. The business risks represent the threats to the ability of an enterprise to execute business process and create customer value. These risks are multifaceted and cut across operational, strategic, systemic and reputational. Insurance business being an enterprise is also faced with these risks. This study aims at finding out whether the management of these integrated risks through enterprise risk management (ERM) can lead to organizational performance in Nigerian Insurance industry. Using purposive sampling technique, ten (10) general insurance companies were selected from forty nine (49) companies operating in
Nigeria. Contingency reserve, shareholders’ fund, gross premium and net premium were used as dummies for ERM indicators. Panel data was adopted for a ten year period of 2001 to 2010. The study reveals that there is joint cause relationship among ERM variables and organizational performance though, individual relationship of the indicators differ. It is recommended that the Nigerian insurance industry should adopt ERM practice in order to boast organizational performance and by extension increases organization’s reputation.
Description
Staff Publications
Keywords
Insurance , Corporate Performance , Risk Management , Business Risk
Citation
Obalola, M.A, Ime, T.A, and Abass, O.A (2014) The Relationship between Enterprise Risk Management (ERM) and Organizational Performance. Research Journal of Finance and Accounting, Vol.5(14) 152-160pp.