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Determinants of Corporate Risk Management: Does Board Size and Tenure Matter? Panel Data Approach from Kenyan Publicly Listed Firms

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  • Thomas Kiptanui TARUS

    (University of Kigali)

Abstract

The investors' weakening confidence towards corporate risk management particularly after the crisis has made corporate governance a top priority for the board. The awareness of risk is growing and firm practices have increasingly become organized around risk. The purpose of this paper is to investigate determinants of corporate risk management by taking into consideration board size and board tenure. The study was informed by Modern Portfolio Theory while panel approach was deemed to be appropriate. Based on inclusion-exclusion criteria, 49 firms were sample from 2013-2019 giving a total of 343 firm-year observations. The findings revealed that board size had a positive and insignificant effect while board tenure was significant and positively related to corporate risk management. The longer the experience of managers, the more knowledgeable they become thus more capable of managing corporate risk. This study contributes by providing additional empirical evidence regarding determinants of corporate risk management.

Suggested Citation

  • Thomas Kiptanui TARUS, 2021. "Determinants of Corporate Risk Management: Does Board Size and Tenure Matter? Panel Data Approach from Kenyan Publicly Listed Firms," Journal of Economics and Financial Analysis, Tripal Publishing House, vol. 5(1), pages 65-79.
    • Handle: RePEc:trp:01jefa:jefa0045
    DOI: 10.1991/jefa.v5i1.a41
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    References listed on IDEAS

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    Cited by:

    1. Ben Kajwang, 2022. "Theoretical review of enterprise risk management culture drivers for insurance firms in Kenya," International Journal of Research in Business and Social Science (2147-4478), Center for the Strategic Studies in Business and Finance, vol. 11(5), pages 210-217, July.

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    More about this item

    Keywords

    Corporate Risk Management; Board Size; Board Tenure; Modern Portfolio Theory.;
    All these keywords.

    JEL classification:

    • G20 - Financial Economics - - Financial Institutions and Services - - - General
    • G30 - Financial Economics - - Corporate Finance and Governance - - - General
    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill

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