The Effect Of Enterprise Risk Management Adoption To Shareholders Wealth And Firm's Riskiness

The aim of this study is to examine the effect of enterprise risk management (ERM) adoption on shareholder wealth and firm’s leverage among Malaysian listed companies. The study provides evidence on the value relevance of ERM, sustainability and corporate governance, compliance by using the Malaysian Code on Corporate Governance (MCCG) as a proxy for ERM implementation. The result shows that, a leverage ratio is significantly lower after the compliance of MCCG2007 (revised code) in phase 2 of ERM implementation. However, a refined examination reveals that the phase 1 of ERM implementation has a better performance after the first code (MCCG2000) has been complied where non-financial company's firms’ value has improved its level of riskiness.