Value maximization determinants of enterprise risk management implementation: a Malaysian evidence

Dynamic enterprises assume new risks in the quest to generate value for their shareholders as risk of adverse consequences inherent in all business activities. As such, it is imperative for the enterprises to put in place a dynamic risk management model. One such model can be represented by enterprise risk management (ERM). However, the neo-classical finance theory (NCFT) postulates that managing firm-specific risk is irrelevant, implying that implementation of ERM has no value to firms. This paper examines value maximization determinants of ERM implementation. The analytic comprises bivariate correlation analysis of hypotheses testing in relation to the various aspects of the value maximization theory of ERM practices.