Literature Review, And Organizational Culture And Risk Management

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Chapter 2- literature review and hypothesis development
According to (Standard & Poors, 2013) framework, the major components of ERM are risk-management culture, risk controls, emerging risks management, risk and capital models, and strategic risk management. COSO (2004) points out that ERM is not strictly a serial process, where one component affects only the next. It is a multidirectional, iterative process in which almost any component can and does influence another. The ERM components (risk management culture, risk control and emerging risks management) are explained in subsequent section.
2-1 risk management culture
(Standard & Poor, 2005) stated that risk management culture is the degree to which risk and risk management are important …show more content…

Moreover (Shahzad, Luqman , khan, & Shabbir , 2012) defined and measured organizational culture and its impact on organizational performance .They found that organizational culture has deep impact on the variety of organizations process, employees and its performance. Research shows that if employees are committed and having the same norms and value as organizations have, they can increase performance towards achieving overall organization goals. Managers are recommended to develop a strong culture in the organization to improve the overall performance of the employees and …show more content…

Corporate governance practices differ due to the nature of the insurance industry, composition of board of directors, independent directors, risk taking characteristics. And company is following corporate governance norms in one form or another according to the laws, guidelines, code of ethics, corporate social responsibility prevalent in the country. The extent to which a company adheres to good corporate governance showcases its honesty in compilation of financial records. Corporate governance also includes risk management since for some insurance companies risk cannot be diversified and therefore their business is always at a risky position. Adherence to governance norms brings simplicity of risk in such companies in the form of lenient regulations, stakeholders and government support. Thus, the following studies will reveal the ever growing importance of corporate governance and risk management in insurance sector (Bansal,

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