The Influences of Risk Management Committee and Audit Committee towards Voluntary Risk Management Disclosure

Abstract

The main objective of this study is to examine the influences of committees that are being appointed to manage risk towards voluntary risk management disclosure (VRMD) among non-financial companies in Malaysia. Non-financial companies will usually appoint either Risk Management Committee (RMC) or Audit Committee (AC) to manage their risks. Based on resource dependence theory, this study contends that the committees provide risk management resources particularly in terms of risk management information that could influence the VRMD. All data of VRMD, RMC and AC were collected from companies’ annual reports by using content analysis method. The sample in this study consisted of 395 non-financial companies which were listed on Bursa Malaysia in 2011. Our multiple regression results show that RMC presence and AC activeness increase VRMD. Our findings provide evidence that the establishment of RMC could increase the risk management disclosure among companies in Malaysia. Keywods: Risk management committee; voluntary disclosure; audit committee; risk management disclosure ABSTRAK Objektif kajian ini adalah untuk menyelidik pengaruh jawatankuasa yang dilantik untuk mengurus risiko terhadap pendedahan maklumat sukarela pengurusan risiko (PMSPR) dikalangan syarikat bukan kewangan di Malaysia. Syarikat bukan kewangan lazimnya melantik sama ada Jawatankuasa Pengurusan Risiko (JPR) atau Jawatankuasa Audit (JA) untuk mengurus risiko. Berdasarkan teori pergantungan sumber, kajian berpendapat bahawa jawatankuasa tersebut menyediakan sumber pengurusan risiko terutamanya dari segi maklumat pengurusan risiko yang mungkin boleh mempengaruhi PMSPR. Semua data PMSPR, JPR dan JA dikutip daripada laporan tahunan syarikat dengan menggunakan kaedah analisis kandungan. Sampel kajian ini terdiri daripada 395 buah syarikat bukan kewangan yang tersenarai di Bursa Malaysia pada tahun 2011. Berdasarkan ujian regresi, didapati kewujudan JPR dan kekerapan mesyuarat JA meningkatkan PMSPR. Dapatan kajian ini menyediakan bukti bahawa penubuhan JPR boleh meningkatkan pendedahan maklumat pengurusan risiko di kalangan syarikat-syarikat di Malaysia. Kata kunci: Jawatankuasa pengurusan risiko; pendedahan sukarela; jawatankuasa audit; pendedahan maklumat pengurusan risiko

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