The Components of Enterprise Risk Management and Financial Performance of the Non-Financial Firms through Mediation of Corporate Reputation

Abstract

Purpose: This research study aims to investigate the relationship between enterprise risk management (ERM) components and non-financial companies’ financial performance (FP), which are listed at PSX, while exploring the corporate reputation (CR) role as a mediation between ERM components and financial indicators performance. Design/Methodology/Approach: This study used a questionnaire survey, and 340 responses were collected from non-financial sector firms’ board executives and top management. The PLS-SEM technique was employed for the data analysis using smart PLS 4.0 software. Findings: the results showed that ERM components significantly influence the corporate reputation. Further, corporate reputation positively and significantly mediates between ERM components and financial performance. This study plays a crucial role in pinpointing and addressing risks within non-financial firms, aiming to enhance the prosperity of the non-financial sector and contribute to overall economic growth through the ERM components framework. Implications/Originality/Value: Future research could extend to various sectors, encompassing financial and non-financial companies, service firms, and the food industry. Such studies could explore the influence of ERM components on financial performance, particularly emphasizing reputation as a critical resource for success in competitive markets.

Keywords

• Enterprise Risk Management (ERM)
• Culture
• Corporate Reputation
• Financial Performance
• Non-financial Sector