Enterprise Risk Management: Empirical foundations, governance integration, and future directions for ERM research

Journal title FINANCIAL REPORTING
Author/s Mark Beasley, Don Pagach
Publishing Year 2026 Issue 2026/1
Language English Pages 18 P. 5-22 File size 235 KB
DOI 10.3280/fr202622593
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Academic research has played an important role in examining the Enterprise Risk Management (ERM) process and thinking about its organizational implications and value. Collectively, this literature reframes ERM as an organizational capability whose effectiveness depends on engagement from board and C-suite leadership, integration of governance activities overseeing both strategic direction and management’s risk-taking, and alignment of risks with strategic incentives. The need for ERM has grown to become a defining element of modern corporate governance, reflecting organizations’ need to manage increasingly complex strategic, operational, financial, and compliance risks that are increasingly present and rapidly evolving in today’s global business environment. Whereas traditional risk management focuses primarily on insurable and financial risks within siloed, functional areas, ERM represents an enterprise-wide approach linking risk identification, assessment, and response to strategic objectives and performance outcomes (COSO 2017). We believe that advances in financial regulations, especially in Europe, provide an opportunity to create a forward-looking research agenda centered on better understanding the dynamics and practices of establishing an appropriate risk culture, risk appetite and risk management disclosure credibility - three mechanisms that increasingly define ERM effectiveness yet remain underexplored in accounting research.

Keywords: Enterprise Risk Management, risk governance, risk appetite, risk culture

Jel codes: G32, G34, M10, M14

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Mark Beasley, Don Pagach, Enterprise Risk Management: Empirical foundations, governance integration, and future directions for ERM research in "FINANCIAL REPORTING" 1/2026, pp 5-22, DOI: 10.3280/fr202622593