A Case Study of Enterprise Risk Management Implementation and its Impact on Sustainability Performance in State Government-Linked Company

Abstract

Enterprise Risk Management (ERM) is an approach that systematically assesses, treats, monitors, and reviews risks to enhance an enterprise’s value and its ability to anticipate and prepare for imminent risks. Previous studies have mainly focused on the impact of ERM implementation on financial performance, while its relationship with non-financial performance, particularly sustainability performance, has received less attention. This study aims to explore the level of ERM implementation and develop a framework to investigate its effect on sustainability performance, encompassing economic, environmental, and social aspects. The study proposes a questionnaire survey to be distributed to respondents involved in risk management implementation, such as the risk committee, risk management workgroup, and the top corporate risk working group, among state government-linked companies. By gathering insights on companies’ ERM implementation and sustainability performance, the study aims to conceptualize the relationship between the two. For data analysis, the statistical package for social sciences (SPSS) is proposed to investigate relationships between constructs and latent variables. Understanding the penetration level of ERM implementation and its impact on sustainability performance will offer valuable insights for formulating strategies to improve the overall performance of state government-linked companies. Keywords: enterprise risk management, sustainability performance, COSO framework, government linked companies