The Valuation Implications of Enterprise Risk Management Maturity

Enterprise Risk Management (ERM) is the discipline by which enterprises monitor, analyze, and control risks from across the enterprise, with the goal of identifying underlying correlations and thus optimizing the risk-taking behavior in a portfolio context. This study analyzes the valuation implications of ERM Maturity. We use data from the industry leading Risk and Insurance Management Society Risk Maturity Model over the period from 2006 to 2011, which scores firms on a five-point maturity scale. Our results suggest that firms that have reached mature levels of ERM are exhibiting a higher firm value, as measured by Tobin's Q. We find a statistically significant positive relation to the magnitude of 25 percent. Upon decomposition of the maturity score, we find that the most important aspects of ERM from a valuation perspective relate to the level of top–down executive engagement and the resultant cascade of ERM culture throughout the firm. Firms that have successfully integrated the ERM process into both their strategic activities and everyday practices display superior ability in uncovering risk dependencies and correlations across the entire enterprise and as a consequence enhanced value when undertaking the ERM maturity journey ceteris paribus.

Parenting practices in Northern Ireland: evidence from the Northern Ireland Household Panel Survey

The impact of parental child-rearing practices on child outcomes has been the subject of much research and debate for many years. Studies carried out within a variety of disciplines and across a number of different countries in the world have indicated that parents tend to use a different pattern of rearing their sons than their daughters, and that child-rearing practices are related to the gender of the parent, as well as to the age and developmental stage of the child. However, there has been little research in Northern Ireland on child-rearing behaviours. In order to address this shortfall, this paper presents an analysis of parents’ perceptions of their interactions with their children. Data from Wave 3 of the Northern Ireland Household Panel Survey were analysed to explore aspects of ‘‘negative’’ parenting practices (arguing, yelling and use of physical punishment) as well as ‘‘positive’’ parenting practices (talking, praising and hugging). The participants were all parents (aged 16 years and over) with children under the age of 16 years living in the same household. Each parent reported his/her interaction with each child (up to a maximum of six children), and in total 1,629 responses were recorded. The results of the research supported previous findings from the United Kingdom and elsewhere, and indicated that the parenting styles of respondents in Northern Ireland were indeed related to the gender and age of the children and to the gender of the parents. The survey found that parents in Northern Ireland tend to have a harsher, more negative style of parenting boys than girls and that children in their teenage years have fewer positive interactions with their parents than younger children. The same parents and children will be followed up in 2007 in order to provide a longitudinal analysis of parent/child relationships in Northern Ireland.