Abstract: -With the advancement in the global economy, corporate risk management has been more impactfully

implemented by firms and equally become a topic of scholarly studies. However, most of these studies are from

different contexts. The purpose of this study is to assess the relationship between enterprise risk management

(ERM) structure and the financial performance of Nigerian listed Services Sector firms from 2010 to 2019. The

study relates risk governance structure to firms financial performance. The ex post facto research design was

adopted, and data were collected from the annual reports and accounts of selected firms with a complete set of

data for the study. From the study population of 25 firms, a final sample of 21 Services Sector firms.

Descriptive and inferential statistics of regression analysis stacked as panel data was employed for data

analysis. The study results revealed that risk management committee had a negative and insignificant

relationship with ROA but significant with Tobin-Q. The size of the audit committee, however, exhibited a

evidence of mixed relationship between risk management structure and firm performance in an under-

investigated context such as Nigeria. It was recommended that the firms should adopt effective risk

management structural practices as a strategy for enduring growth and survival in the face of environmental

complexity. Also, further research is suggested to extend the study by widening the scope and context of the

research.

Key-Words: risk management structure; risk governance; performance; ROA; Tobin-q; Services firms Nigeria

Received: May 17, 2021. Revised: January 27, 2022. Accepted: February 10, 2022. Published: February 21, 2022.

workforce demographics risk, varied financing

instruments, etc. (Liff, & Wahlstrom, 2018).

However, risk management has become the focus of

many executives who are exploring ways to

measure these risks and better understand their

business failure. This is because risk has become

one of the key important variables that impact the

attainment of the objective of an enterprise

(Niehaus, 2017; Salaudeen, et al., 2018).

One of the primary objectives of an enterprise is to

in risk management. Also, the sources of risk and its

consequences are becoming more difficult to

handle. These range from sudden variations in

demand to the insolvency of a key supplier, from

terrorist attacks to cybercrime, etc. (McShane,

2018). The has attendant threats to the smooth

running of business operations and the

consequences of such risk events are on the increase

(Olson, & 2020). Therefore, for most firms

managing risks is not just desirable, it is essential

broad approach to risk management, requires the

identification, assessment, and management of risk

in a unified and organized way and it consists of risk

governance and risk aggregation (Ahmed, & Manab,

2016; Linke, & Florio, 2019). It has been considered

as a robust framework to assess and manage the risk

that an enterprise faces in achieving it's objective

and to meet the standard of compliance of the

creditors, rating agencies, regulators, and stock

exchanges (Hoyt, & Liebenberg, 2011; Dugguh, &

Liebenberg, 2011), ERM could foster more efficient

investment allocation, robust capital structure

unpredictable wave of globalization have

heightened the risk of firms and has resulted in

declining performances of firms (Ahmed, & Manab,

2016; Slagmulder, & Devoldere, 2018). Studies also

have indicated that the rate at which business

Therefore, to attain the objective of this study, the

study hypothesizes that:

(Bogodistov, & Wohlgemuth, 2017; McShane,

2018). It equally accentuates the implementation of

the ERM framework by firms being dependent on

the scope of the existence of enabling laws and

regulations, coupled with the listing standards and

regulatory bodies and the size of the enterprise

(Karanja, 2017; McShane, 2018).

Performance measurement concept refers to the

efficiency and effectiveness (Landy, et al., 2017).

This performance measurement is essential for the

effective management of the firm (Inkinen, 2016;

Sutrisno, 2019). Many methods have been advanced

organizational performance. This study, therefore,

ERM on listed firms’ performance.

The agency theory by Berle and Means, (1932)

serves as the theoretical underpinning for this study.

Agency theory emphasized the need for resolution

assets and the influence is moderated by stakeholder

related variables such as the intensity of innovation

and knowledge focused industry structures.

To address the problem of heteroscedasticity, Florio

advanced levels of ERM implementation exhibited

higher performance, both in the financial

performance and market evaluation. The study

recommended that this should be extended to other

contexts

It was in the same vein that, Kaya, (2018) examined

the effectiveness of internal control and ERM on the

firms’ value creation and revealed that firm

performance and value are enhanced by high-quality

ERM adoption and implementation. Also, Silva and

revealed inconclusive results while, Ojeka, et al.,

(2019) examined the impact of CFO roles in the

implementation of ERM initiatives from a sample of

Nigerian financial sector firms. Highlighting a

minimal impact. The study, however, shows

possible omission of variables. Also, the studies

from Nigeria have considered only the performance

of firms using ROA as against Tobin-Q, which is

regarded as a preferred measure of firm value.

Zemzem and Kacem, (2014) revealed that having a

revealed that none of the three risk management

strategies increase firm value. Jonek-Kowalska,

of financial results and enterprise value.

independent sources rather than originated by the

researcher.

The following measurements were employed to

examine the impact of ERM on financial

performance.

The model predictor variables are:

Because the study is structured using a regression

model. The model by Salaudeen, et al., (2018) was

adapted for this work as specified below.

4 Results and Discussion

To enable the study to use regression analysis,

which allows for an assessment of whether one or

more predictor variables explain the dependent

of the estimates results of the fixed and random

estimators; the standard is that; there is a null

hypothesis of random effect model and the other an

alternative hypothesis of fixed effect, therefore, this

test enables the study to decide the appropriate

models to use for the panel data analysis.

In table 4a the estimated value of the intercept (βo=-

0.201) conforms to the expectation that a negative

level of performance is attainable when the firms do

not comply with the ERM structural practices. This

is shown in figure 1.

Also, from table 4b, for model 2, the estimated

value of the intercept (βo=-0.480) follows the

expectation that a negative level of performance is

these results support the findings by Iswajuni, et al.,

2018; Zungu, et al., 2018; Muslih, 2019 and Busru,

et al., 2019.

p-value = 0.443. This indicates a negative but

statistically insignificant relationship between

(B_FINEXP) and ROA. Therefore, the study failed

to reject the null hypothesis.

4b model 2, with β = (- 0.017) and p-value = 0.732.

This depicts a negative and statistically insignificant

relationship between (B_FINEXP) and Tobin-Q.

et al., (2019).

on the performance of Nigerian quoted services

(ROA): in table 4a model, 1 with β =0.274, and p-

value = 0.000. This indicates that there is a positive

This also, reveals a positive and statistically

significant relationship between CRO and Tobin-q.

Rosso, (2017); Bailey, (2019); and Girangwa, et al.,

(2020).