Corporate governance perspective on enterprise risk management and organizational sustainability

Abstract

The study was designed to explore the relationship between enterprise risk management and organizational sustainability. Enterprises can only meet the generational intention of founders when they are properly managed exemplified by sustainable performance. Business failures in recent history refocused attention towards good enterprise risk management to promote organizational sustainability. Sustainability implies meeting the needs of the present generation without compromising the needs of the future generations, and this cannot happen in an environment drenched in weak enterprise risk management. Corporate governance perspective suggests that the BODs of a company has the ultimate responsibility to establish effective risk management framework for the healthy performance and sustainability of the enterprise. Therefore, a major concern of the BODs is to diversify away risks and to create a stable average to enhance organizational performance.  Management decision making as an integral part of modern management aims at both enterprise risk minimization and the optimal achievement of organizational goals and sustainability. The exploratory research design was used for the study. Data generated and analyzed through statistical techniques, showed strong positive relationship between enterprise risk management and organizational sustainability. Because of limitations in terms of current literature, the study was not exhaustive; therefore, further study should examine the relationship between weak risk management and enterprise failure. It was recommended that complex organizations must establish good corporate governance structure to promote enterprise risk management and organizational sustainability.