Factors Affecting Risk Management and The Moderating Role of Leadership Commitment

Abstract:

This study examines the impact of internal factors, specifically risk culture, risk governance structure, resources and capabilities, integration systems, and employee engagement, on the implementation of enterprise risk management (ERM). Furthermore, this study investigates the moderating role of leadership commitment in bridging the gap between these internal factors and ERM implementation success in joint-stock commercial banks (JSCB) in Ho Chi Minh City (HCMC). This study is based on survey data collected from managers and risk experts at JSCB. The PLS-SEM methodology was used with SmartPLS software. The results show that all five internal factors positively influence ERM implementation. In particular, leadership plays a crucial regulatory role. This study provides empirical evidence from a developing financial center, HCMC, during its transition to BASEL III standards.