Non-Financial Corporations ERM Evaluation And Its Impact To Enterprise Value

Since the nineties of last century, social economic and business changes called for innovation in enterprise risk management capability. Enterprise risk management (ERM) as a new method to control risk started to be used in business management practice. At the beginning of this century, ERM gradually attracted academic attention, and was summarized into theory to guide corporate management practices, what’s more since the financial crisis in the year2007-2009, the ERM theory has become a hot topic in the field of research. After a series of frame analysis and indicators definition, foreign scholars have tried to use a standard pattern to delineate the extension and intension of comprehensive enterprise risk management, and investigate its impact on business performance improvement and value added. From the view of domestic research, mostly concentrated in the conceptual framework and management logic analysis, the study on ERM framework is not deep enough. And because of lacking ERM practices, leading to blank in empirical research of ERM program’s impact on corporate performance and the value of enterprises.Firstly, according to the discussion of ERM in the former literature, we put forward the hypothesis that the enterprise value of the enterprise risk management has a significant positive effect. Then, started from the "four goals" frame in COSO’s "Enterprise Risk Management Framework" we layered the objectives of ERM and looked forward to indicators in each sub-index system to build a complete index system. Then we used of the data of1875listed companies in Shanghai and Shenzhen from the year2007to2012as a sample, calculated the effect of enterprise risk management. Thereafter, the article used sectional regression and panel data regression method to verify the hypothesis that enterprises can design and implement their ERM system to get the value added. Finally, the main conclusions were summarized, and relevant recommendations were made.The main conclusions are:(1) the level of the enterprise risk management assessment should be based on the achievement of the "five goals" of ERM rather than whether a company had hired a chief risk officer (CRO);(2) China’s enterprises have a "small company" effect, corporate management should be strengthened;(3) enterprise risk management has a positive effects on enterprise value added.Papers possible innovations are:(1) In the absence of a Standard&Poor’s rating under reference, designed a set of index system for evaluation of China’s listed companies ERM, and evaluated China’s listed companies’ERM performance in the year2007to2012(2) in the aspect of empirical research, proved that enterprise risk management has a positive effects on enterprise value, and to some extent showed that the enterprise risk management enhance the value of China’s companies.(3) tried to use variable coefficient panel models to analyze our study, and carded the variable coefficient models.