Moderating influences on the ERM maturity-performance relationship

Abstract Enterprise Risk Management (ERM) focuses on the elevation of risk management to the center of the firm’s strategic activities. Risks are treated both as exposures to be managed and opportunities to be exploited. This study examines the firm performance implications of ERM maturation and more specifically firm characteristics that serve to engender or inhibit these performance implications. We find that in general ERM maturation increases firm value and return on assets and the impact is moderated by stakeholder related factors such as innovation intensity and knowledge focused industry structures. Additionally, we show that a firm’s complexity moderates the effect of ERM valuation over the long term.