The Impact of Enterprise Risk Management and Family Ownership to Firm Performance in Indonesia: Busy Directors as Moderating Variables Ika Dewi Agustin (a*), Cynthia Afriani Utama (b)
(a*) Faculty of Economics and Business, University of Indonesia
Jalan Salemba Raya 4, Jakarta, 10430, Indonesia
(b) Faculty of Economics and Business, University of Indonesia
Jalan Salemba Raya 4, Jakarta, 10430, Indonesia
Abstract
Enterprise Risk Management and Corporate Governance have become important things in managing the company. Both are believed to be able to reduce agency problems, between company owners and managers or between shareholders. Using a panel data regression analysis model with a sample of 602 non-financial listed public companies in Indonesia on 2019-2021 period, this study focuses on the effect of the existence of the Risk Management Committee and family share ownership on firm performance (ROA). This study also uses busy directors as a moderating variable. The result of this research is the existence of the Risk Management Committee has a positive and significant effect on ROA. But family share ownership has a negative and significant effect on ROA. The existence of commissioners who hold concurrent positions in other companies at the same time or busy directors, was found to weaken the two relationships.
Keywords: Enterprise Risk Management- Family Ownership- Busy Directors, Firm Performance
