Enterprise Risk Management and Firm Performance Amongst Financial Firms Listed at the Nairobi Securities Exchange

Abstract

In the recent past, there has been an approach to risk management where risk is consolidated and managed for the entire organization at once unlike previously where risk were managed per departments or per projects. Enterprise risk management thus brings all the factors together to mitigate risks at once for the firm. Firm performance on the other hand allows for measurement of growth on the shareholders’ value. The study adopted two objectives of finding out the existence of ERM practices amongst financial firms listed at the NSE and determining whether there was a relationship or not between ERM and firm performance amongst financial firms listed at NSE. The study used descriptive research design and considered the entire population of the seventeen financial firms listed at the NSE for a period of two years, 2017 and 2018. The study used secondary data. The data collected was analyzed by SPSS using descriptive statistics and Pearson’s correlation analysis. The study findings revealed that whereas most firms adopted and disclosed the ERM practices in their annual integrated reports, there was no significant correlation coefficient between ERM and firm performance amongst financial firms listed at NSE.The study thus recommends that the management of the financial firms listed at the NSE should allocate very minimal resources in ERM implementation given that ERM has no influence at all on firm performance.