How to manage corporate reputation? The effect of enterprise risk management systems and audit committees on corporate reputation
By Clara Pérez‐Cornejo, Esther Quevedo‐Puente, J. Delgado‐García. European Management Journal, 2019
130 citations recorded by the source corpus.
Abstract Research on corporate reputation has generally argued that reputational risk, or risk of reputation loss, stems from all company risks. As companies use enterprise risk management (ERM) systems to manage all their risks, we analyse the effect of ERM system quality on corporate reputation. Furthermore, as audit committees are in charge of supervising ERM systems, we analyse the effect of audit committee characteristics (i.e. independence and independent members' knowledge and diligence) on corporate reputation through their effect on ERM system quality. Our results for a sample of listed Spanish firms support consultants’ arguments that ERM system is a useful tool for managing corporate reputation. Our results also show that audit committee independence improves corporate reputation through the ERM system. Finally, our findings also reveal a positive relationship between the average educational level of independent directors of the audit committee and ERM system quality. These results provide evidence that ERM systems are platforms to manage corporate reputations and suggest the importance of the audit committee as a supervisor of ERM system and as guarantor of corporate reputation.
Subfields: Accounting, Strategy and Management
View Paper: https://www.semanticscholar.org/paper/ec209f3e99a5d5c5ad75d2dbb5110ad04bec0a6d
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Citations in the corpus
- Enterprise Risk Management: A Literature Review and Agenda for Future Research (2020, background): “Also, ERM is found to influence, positively, corporate reputation, according to the empirical evidence provided by Perez-Cornejo et al. (2019) for Spain.”