A Conceptual Framework for Enterprise Risk Management performance measure through Economic Value Added

• Main Authors: Shad, Muhammad Kashif, Lai, Fong Woon
• Format: Citation Index Journal
• Published: 2015
• Online Access: http://eprints.utp.edu.my/11845/1/A%20Conceptual%20Framework%20for%20Enterprise%20Risk%20Management%20performance%20measure%20through%20Economic%20Value%20Added.pdf; http://eprints.utp.edu.my/11845/
• Institution: Universiti Teknologi Petronas

Enterprise Risk Management (ERM) is an essential technique used to manage a myriad of risks in a holistic manner. The purpose of this study is to propose a conceptual framework for investigating the impact of ERM on the firm’s value through Economic Value Added (EVA) performance measure. The research design for our study incorporates conclusive research. It covers the descriptive and cross sectional design. It focuses specifically on the objective performance measures of ERM through EVA measure approach. The study adopts an ERM implementation framework comprising three dimensions namely, structure, governance, and process which will be translated into fourteen implementation elements. The study estimates the positive effect of ERM using EVA as a measuring proxy for firm value. EVA computes company profit by incorporating cost of capital.