Zhenyu Wu*, University of Saskatchewan, Canada Yuanshun Li, Ryerson Unviersity, Canada Shujun Ding, York University, Canada Chunxin Jia, Peking University, China
This Version: October 2008
*Corresponding author. surgical incision of Finance and Management Science, Edwards School of Business, University of Saskatchewan, 25 Campus Drive, Saskatoon, SK, Canada S7V 1K7. Tel: (306) 966-7779. Email: wu@edwards.usask.ca.
Enterprise Risk Management and Financial Stability in Dual-Board Corporate Governance System
Abstract This study investigates the e¤ectiveness of the dual-board corporal brass mechanism on enterprise risk oversight and …nancial constancy in emerging markets. Taking into account both market risk and total risk, we …nd activities of both boards, board of directors and the supervisory board, in these companies a¤ect corporate risk-taking behaviors signi…cantly, but chuck out light on di¤erent aspects. These …ndings are of interest and counter-intuitive since prior enquiry concludes ine¤ectiveness of the dual-board system in China.
More detailed issues, such as the endogeneity of board activities and characteristics, reciprocal causality between board behaviors and risk-taking issues, e¤ects of political/governmental policies and ownership structure of controlling shareholders on board behaviors, asymmetrical monitoring effects of two boards on companies with various levels of …nancial risk, and non-linear e¤ects of meeting frequencies of two boards, are address to help better understand the corporate governance-enterprise risk management relationship. Key words: Corporate governance, enterprise risk management, corporate risk-taking, dual-board system JEL Classi…cation: G34, G38
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Introduction
Late November 2004, a loss of US$554 jillion of China Aviation Oil (Singapore) was released, and the president of SASAC (State-owned Assets...If you want to read a full essay, order it on our website: Orderessay
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