ESTIMATION OF RISK MANAGEMENT EFFICIENCY FROM THE PERSPECTIVE OF THE STAKEHOLDERS

Vasilisa Makarova

doi:10.12955/ejbe.v10i2.694

Vasilisa Makarova Associate Professor, Department of Finance, National Research University – Higher School of Economics

DOI: https://doi.org/10.12955/ejbe.v10i2.694

Keywords: efficiency, risk management, rating score, integral rating, investment attractiveness

Abstract

Estimation of efficiency from the perspective of an external investor draws a high enough interest in assessing the efficiency of risk management. Since the methods risk management are nontransparent information, the carrying out of empirical research is enough complicated. However, in a number of papers the elements of the assessment of so-called "market efficiency" are traceable, among which the most common factors are: the behavior of stock prices at the moment of collapse of the market, lower average cost of capital. However, a comprehensive study on risk management efficiency of companies from the perspective of stakeholders has not yet provided. The aim of this study is to fill this gap. The purpose of this study is as follows: to identify how stakeholders assess the key factors of risk management efficiency, and to create a comprehensive approach to the implementation of this assessment with the using of statistical research techniques and methods. The object of study is the Russian real sector of economy, the subject of study is the risk management efficiency of companies. In this article author provides the results of the survey on the evaluation the risk management efficiency, processed by means of statistical analysis methods calculation of the actual ratings of Russian companies on the basis of the criteria obtained from the survey, as well as the results of the regression analysis of the impact of identified efficiency criteria of risk management on the investment attractiveness of Russian companies. In the article Russian companies are ranked based on their risk management efficiency.

References

Aabo T., Fraser J., Simkins B. (2005). The Rise and Evolution of the Chief Risk Officer: Enterprise Risk Management at Hydro One.Journal of Applied Corporate Finance- №17 - pp. 62-75

Beasley, M., Pagach, D., Warr, R. (2008). Information conveyed in hiring announcements of senior executives overseeing enterprise-wide risk management processes. Journal of Accounting Auditing and Finance, № 23, pp. 311.

BS 31100: 2008. (2008). Retrieved September 28, 2014, http://shop.bsigroup.com/ProductDetail/?pid=000000000030191339;

Badalova A.G. Panteleyev P.A. (2011). Functional diagram of the system of strategic management of enterprise risks aviation industry on the basis of cost-based approach [Funktsional'naya skhema sistemy strategicheskogo upravleniya riskom predpriyatiya aviatsionno-promyshlennogo kompleksa na osnove stoimostnogo podkhoda]. Vestnik Yurgtu (NPI). №5. -S.21-29.

Borisov V.N. (2015). Microeconomics [Mikroekonomika]: V 5-kh t. Obshch. red. Cheplyanskogo YU.V .. - SPb .: Ekonomicheskaya shkola, - T. 7, pp.1171.

COSO ERM - Integrated Framework (2004). Retrieved September 28, 2014 ,, from http://www.coso.org/-ERM.htm;

Damodaran A. (2007). Return on Capital (ROC), Return on Invested Capital (ROIC) and Return on Equity (ROE): Measurement and Implications. pp. 5-7. Retrieved April 15, 2015, from http://www.fep.up.pt/disciplinas/mbf922/Damodaran%20-%20return%20measures.pdf

Davila A and Foster G. (2005). Management accounting systems adoption decisions: evidence and performance implications from early-stage / startup companies. The Accounting Review 80 (4), pp. 1039-1068.

Davila A, Foster G (2007). Management control systems in early-stage startup companies. The Accounting Review 82 (4), pp. 907-937. Retrieved September 28, 2014

Drobetz W., Schillhofer A., Zimmermann H. (2003). Corporate Governance and Expected Stock Returns: Evidence from Germany University of Basel; Working paper of WWZ / Department of Finance. Retrieved September 28, 2014, from http://bjournal.co.uk/paper/BJASS_14_2/BJASS_14_02_05.pdf

FERMA Risk Management Standard (2003) Retrieved September 28, 2014, from http://www.ferma.eu/risk-management/standards/risk-management-standard

Gort M. (1962). Diversification and integration in American industry. - Prinston, Prinston University Press, - 508 p. 1962.

Hoyt R., Liebenberg A. (2006). The value of enterprise risk management: Evidence from the U.S. insurance industry. Working paper of University of Georgia .. pp 1-28. Retrieved January 06, 2015, from http://onlinelibrary.wiley.com/doi/10.1111/j.1539-6975.2011.01413.x/abstract

Ingley C., Van der Walt N. (2005). Do Board Processes Influence Director and Board Performance? Statutory and Performance Implications. Corporate Governance: An International Review. Vol. 13. N 5. P. 632-653.

ISO 31000 - Risk Management. (2011). Retrieved September 28, 2014, from http://www.iso.org/iso/home/standards/iso31000.htm;

Ittner, C. D. Larcker D. F. (2001, December). Assessing empirical research in managerial accounting: A value-based management perspective. Journal of Accounting & Economics - J ACCOUNT ECON, vol. 32, no. 1, pp. 349-410. Retrieved January 06, 2015, from http://www.sciencedirect.com/science/article/pii/S016541010100026X

Larcker D.F., Richardson S.A., Tuna A.I., (2005). How Important is Corporate Governance ?, Philadelphia, PA: (Working Paper, University of Pennsylvania) University of Pennsylvania. Retrieved March 11, 2015 http://papers.ssrn.com/sol3/papers.cfm?abstract_id=595821

Ragulina S. (2010). ERM and the cost of borrowed capital. Impact of risk management on the cost of borrowing [RM i stoimost 'zayemnogo kapitala. Vliyaniye sistemy risk-menedzhmenta na stoimost 'zaimstvovaniy]. & .FINANSIST. Retrieved January 28, 2015 from

Smithson C., Simkins B. (2005). Does Risk Management Add Value? A Survey of the Evidence.Journal of Applied Corporate Finance.- №17. pp. 8-17.

Yoshinara E., Sakuma A., Itami K. (1979) .Diversification strategy in the Japanese company. - Tokyo, Nipon Keirai, pp. 468