The role of the board and the audit committee in corporate risk management

Tai, Vivian W.; Lai, Yi-Hsun; Yang, Tung-Hsiao

doi:10.1016/j.najef.2018.11.008

Cited by 31 publications

(48 citation statements)

References 49 publications

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“…Our results implicate that financial and accounting experts are more important in emerging and developing markets than in a developed market. These results are also consistent with the work of Tai et al (2018). Because financial experts are knowledgeable about bank risk, they can effectively oversee risk management issues.…”

Section: Audit Committee Structure and Bank Stabilitysupporting

confidence: 88%

“…The results show that the audit committee size correlates negatively with the bank stability. This result is different to that of Tai et al (2018) and does not support the work of Baxter and Cotter (2009). Tai et al (2018) identified a negative relation between audit committee size and firm risk, but their study only focused on large firms in developed markets.…”

Section: Audit Committee Structure and Bank Stabilitycontrasting

confidence: 68%

“…These studies suggest that accounting or financial expertise plays an important role in the oversight of managers. Tai et al (2018) find that the higher proportion of financial experts the in audit committee, the higher the incentive to hedge and the higher the likelihood to have a higher hedge ratio or get lower risk. However, Sun and Liu (2014) find no evidence about the relationship between financial expertise and banks' risk-taking behaviors.…”

Section: Measurement Of Audit Committee Structurementioning

confidence: 84%

“…However, Aldamen and Duncan (2013) found that audit committee size had positively impact on firm performance during the Global Financial Crisis. Tai et al (2018) find a significant and positive impact on a firm's decision of whether to hedge. Baxter and Cotter (2009) argue that large audit committees are more likely to have members with varied expertise for effective oversight, and suggest that large audit committees may have higher monitoring effectiveness.…”

Section: Measurement Of Audit Committee Structurementioning

confidence: 85%

“…They also reveal a positive relationship between the average educational level of independent directors of the audit committee and a firm's risk management system quality. Tai, Lai, and Yang (2018) state that the audit committee plays an important role in the firm's hedging decisions. The characteristics of the audit committee -including the number of audit committee members, the number of audit committee meetings, the percentage of financial experts on the audit committee and the number of independent directorshave a significant and positive impact on a firm's decision of whether to hedge.…”

Section: Audit Committees and Bank Stabilitymentioning

confidence: 99%

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Audit committee structure and bank stability in Vietnam

2019

JOFRP

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The role of the audit committee in maintaining banking stability is becoming increasingly important. However, there are not many studies have examined the relationship between the audit committee structure and bank stability in developing countries. This paper examines the relation of the audit committee structure and the bank stability in the difference level of bank stability and the role of external audit quality in this relation by employing empirical techniques like 2SLS, S-GMM or quantile regression analysis with panel data, and using a sample of 37 commercial banks in Vietnam from 2002 to 2018. Our empirical results show that bank stability varies negatively with audit committee size, but this relationship is mitigated in banks that use good external audit services. Moreover, we also find that the relation of the audit committee structure and bank stability is heterogeneous, and that it is stronger in banks with higher stability levels. Based on these results, banks that have a large audit committee should consider a high quality external audit service and should increase the proportion of financial and accounting expertise in the audit committee in order to ensure bank stability.

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Section: Audit Committee Structure and Bank Stabilitysupporting

confidence: 88%

Section: Audit Committee Structure and Bank Stabilitycontrasting

confidence: 68%

Section: Measurement Of Audit Committee Structurementioning

confidence: 84%

Section: Measurement Of Audit Committee Structurementioning

confidence: 85%

Section: Audit Committees and Bank Stabilitymentioning

confidence: 99%

See 3 more Smart Citations

Audit committee structure and bank stability in Vietnam

2019

JOFRP

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Systemic risk in non financial companies: Does governance matter?

Cucinelli

Soana

2023

International Review of Financial Analysis

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Enterprise risk management and performance of the South African insurers: the moderating role of corporate governance

Horvey,

Odei-Mensah

2024

Risk Manag

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This study contributes to the literature by examining the effect of enterprise risk management (ERM) on insurers’ performance (underwriting performance and Return on Assets) and investigating how corporate governance characteristics such as board size, board independence and gender diversity moderate the ERM-performance relationship. The study employs the generalised method of moments on a sample of 63 insurers in South Africa, covering 2015–2019. The study’s findings agree with the literature that a positive relationship exists between ERM and insurers’ performance. This was consistent with both performance indicators. Again, we find that board size, board independence, and gender diversity interact with ERM in affecting insurers’ performance, and the relationship was significantly positive. This implies that corporate governance plays a significant role in promoting ERM effectiveness in affecting performance. Therefore, insurers interested in ensuring a robust ERM system should leverage these governance factors to appreciate the overall impact of ERM on performance.

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The role of the board and the audit committee in corporate risk management

Cited by 31 publications

References 49 publications

Audit committee structure and bank stability in Vietnam

Audit committee structure and bank stability in Vietnam

Systemic risk in non financial companies: Does governance matter?

Enterprise risk management and performance of the South African insurers: the moderating role of corporate governance

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