The Role of Quality Board of Directors in Enterprise Risk Management (ERM) Practices: Evidence from Binary Logistic Regression

The purpose of this research is to examine the factors associated with the level of adoption of Enterprise RiskManagement (ERM) among public listed companies in Malaysia. The aim of this particular study is to examinethe relationship between the quality of Board of Directors (BOD) with regard to the level of ERM adoptionwithin the companies involved. Binary Logistic Regression was conducted to test the hypothesis on surveyedfirms selected from the seven industries listed on the main board of Malaysia Bourse. The specific researchquestions are: What is the level of ERM adoption among the Malaysian public listed companies?, Will quality ofBoard of Directors affect the level of adoption of ERM of Malaysian public listed companies? An interestingfinding from this study is the positive correlation between the quality of BOD on the level of ERM adoption.This study will be able to shed some insights into the ERM activities of multinationals from a developingcountry’s perspective by identifying the level of stages that Malaysian public listed companies are adoptingERM. Studies of the management of Enterprise Risk by multinationals from developing countries, includingMalaysia meanwhile, have been scarce. This research aims to fill this research gap by analysing the managementof risks in Malaysian multinationals, with a special focus on ERM.