ENHANCING BANKING PERFORMANCE THROUGH HOLISTIC RISK MANAGEMENT: THE COMPREHENSIVE STUDY OF DISCLOSURE APPROACH

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Marhamah Rafidi Jamaliah Said Soheil Kazemian Nor Balkish Zakaria

Abstract

Enterprise risk management (ERM) concept received much attention from businesses and industries in Malaysia, in practice Bursa Malaysiaintroduced new guideline on voluntary risk disclosure practice in annual report which also known as 2013 Bursa Malaysia Guideline (effective on 1January 2013). However, overall development and practical application of 2013 Bursa Malaysia guideline has been rather limited studies especiallyin banking area. Apparently, scholarly research activities in this particular area of interest are totally lacking hence lead to the essential need of thisempirical study. In line with that statement, this paper aims to investigate the significant mean difference of ERM adoption among Malaysian BankingInstitutions before and after a new guideline is in effect were based on voluntary disclosure practices in the annual report using common termsas a proxy for ERM adoption, and also investigate its effect onto banking performance. Content analysis was performed on the annual reports of 102banking institutions; in addition return on Assets (ROA), return on Equity (ROE) and Non-Performing Loan (NPL) were used to determine the effectof ERM adoption towards banking performance. All in all, the findings show that the overall level of ERM disclosures among Malaysian bankinginstitutions have improved significantly after and before the cut-off date the 2013 Bursa Malaysia Guideline is in effect. In conjunction, the findingsalso reveal that ERM disclosure is positively influenced the Return on Asset (ROA) and Return on Equity (ROE) in banking institutions whereas ERMdisclosure do not influenced on Non-Performing Loan (NPL).
Keywords: Content analysis, disclosure, keyword search, enterprise risk management, banking, performance

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How to Cite
RAFIDI, Marhamah et al. ENHANCING BANKING PERFORMANCE THROUGH HOLISTIC RISK MANAGEMENT: THE COMPREHENSIVE STUDY OF DISCLOSURE APPROACH. Management & Accounting Review (MAR), [S.l.], v. 15, n. 1, p. 315-339, june 2016. ISSN 2550-1895. Available at: <http://arionline.uitm.edu.my/ojs/index.php/MAR/article/view/575>. Date accessed: 24 sep. 2018.
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