Normative Framework for Risk Governance Index and Its Empirical Analysis
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This chapter aims to provide a normative framework to measure the quality of risk governance structure. The index is based on 11 variables, namely, size of board, board diversity in terms of gender, proportion of executive directors, executive/non-executive status of Chairperson, proportion of independent directors, CEO duality, chief risk officer (CRO), risk management committee, mandatory committees, voluntary committees and existence/non-existence of whistle-blower policy. The index has been then empirically computed for the sample 429 non-financial companies for each of the 10 years from 2005 to 2015. In addition, an aggregative analysis, focussing on phase-wise, age-wise, and industry-wise analysis has been carried out. Further, a disaggregative (variable-wise) detailed analysis has been carried out to develop a deeper understanding of elements that are essential to have a robust risk governance structure.
KeywordsRisk governance Corporate governance Risk management Chief risk officer
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