FACTORS INFLUENCING ADOPTION OF ENTERPRISE RISK MANAGEMENT

In the new global economy, Enterprise Risk Management (ERM) becomes a main issue in making a good evaluation of a firm’s risk situation and can increasingly improve decision-making to be effective in strategic and operational development for managing the risks. Thus, this paper aimed at reviewing some previous studies on Enterprise Risk Management, particularly on factors that significantly influence ERM, such size of the firm, board independence, organization culture, and the chief risk officer. The study was conducted based on secondary data by reviewing some of the past studies related to ERM. In conclusion, this study indicated that the firm’s size has a considerably beneficial influence on the adoption of ERM, which is consistent with previous studies, even though there are still few empirical works and studies on ERM. It was also discovered that hiring a CRO had a positive effect on ERM adoption, indicating the establishment of an ERM program within the organisation.