Examining the impact of board of directors, chief risk officers, and intellectual capital on enterprise risk management effectiveness in the mining sector

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Abstract

The mining sector in Southeast Asia is particularly susceptible to external disturbances, including fluctuations in commodity prices and rigorous regulatory constraints. These factors have the potential to significantly influence operational resilience and profitability. However, the implementation of effective governance and risk management strategies can assist companies in mitigating these risks and attaining optimal performance (Pangestuti et al., 2024). This study examines the roles of the board of directors (BOD) and the chief risk officer (CRO) in enhancing enterprise risk management (ERM) and improving firm performance (FP) in the mining sector of Southeast Asia. The study employs quantitative methods, including regression analysis and moderated regression analysis (MRA), to examine data from 205 mining companies over a seven-year period. The findings indicate a positive correlation between active BOD involvement and ERM effectiveness, with the presence of a CRO significantly enhancing risk management processes. The concept of intellectual capital (IC) is identified as a moderating factor that enhances the relationship between ERM and FP, thereby leading to superior outcomes. These findings underscore the necessity for robust governance structures and strategic risk management roles, offering practical insights for mining companies in Southeast Asia to enhance stability and growth.

Keywords: Board of Directors, Chief Risk Officer, Enterprise Risk Management, Intellectual Capital, Firm Performance

Authors’ individual contribution: Conceptualization — D.C.P. and A.F.; Methodology — D.C.P. and A.F.; Formal Analysis — D.C.P., A.F., R.I., and F.M.S.; Investigation — D.C.P., A.F., R.I., and F.M.S.; Writing — Original Draft — D.C.P. and A.F.; Writing — Review & Editing — D.C.P., A.F., R.I., and F.M.S.; Supervision — D.C.P. and A.F.; Project Administration — D.C.P., A.F., R.I., and F.M.S.; Funding Acquisition — D.C.P. and A.F.

Declaration of conflicting interests: The Authors declare that there is no conflict of interest.

JEL Classification: H26, M14, M40, M41, M48

Received: 22.05.2024
Revised: 02.09.2024; 03.10.2024; 27.03.2025
Accepted: 24.04.2025
Published online: 28.04.2025

How to cite this paper: Pangestuti, D. C., Fadila, A., Imayda, R., & Setiawan, F. M. (2025). Examining the impact of board of directors, chief risk officers, and intellectual capital on enterprise risk management effectiveness in the mining sector. Journal of Governance & Regulation, 14(2), 125–134. https://doi.org/10.22495/jgrv14i2art13