The mediating role of firm risk: The case of the insurance sector in Saudi Arabia
Abstract
This study aims to examine the mediating effect of firm risk on the relationships between board structure and firm performance. The multivariate panel data regression technique is employed to analyse the mediating impact of firm risk on 27 listed insurance companies on the Saudi Stock Exchange (Tadawul) from 2016 to 2021. The findings of this study indicate that firm risk partially mediates the relationship between audit independence and Tobin's Q. In contrast to the existing literature, the study reveals that boards composed of independent members may lack effectiveness in their monitoring role, leading to higher risk-taking behaviour. This paper contributes to the literature on corporate governance and firm performance by examining the association through the lens of firm risk.
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Author's Biography
Shanar Shafi Alsuyayfi is a PhD student at the UKM Graduate School of Business, Universiti Kebangsaan Malaysia. He received his Master of Commerce (Finance) from The University of Adelaide, Australia, obtained in 2012, and a Bachelor of Business (Finance) from Auckland University of Technology, New Zealand, obtained in 2009.
Roslan Ja'Afar is a senior lecturer at UKM Graduate School of Business, Universiti Kebangsaan Malaysia. He received his Bachelor of Economics (Bec Hons) from Universiti Kebangsaan Malaysia and an MBA from Universiti Putra Malaysia. He also received his PhD (Business) from Western Sydney University. His major research interests include pension systems, bank risk, finance and economics.
Rasidah Mohd Said is an associate professor based at the UKM Graduate School of Business, Universiti Kebangsaan Malaysia. She holds a Doctor of Business Administration (DBA) obtained from the Universiti Kebangsaan Malaysia in 2003, an MSc In Actuarial Science from the University of Nebraska – Lincoln, Nebraska, USA obtained in 1987 and a BSc in Actuarial Science from the University of Nebraska – Lincoln, Nebraska, USA obtained in 1985. She has extensive experience teaching advanced quantitative techniques, managerial finance, financial markets and institutions and a practical guide to the Malaysian equity market. Her research areas are finance and insurance.
Ali Albada is an assistant professor based at Sohar University. He holds a DBA in Finance from the National University of Malaysia. He has extensive experience teaching accounting and finance courses at both undergraduate and postgraduate levels, and his research area focuses on initial public offerings (IPOs), environmental, social and governance (ESG) and corporate governance.
Citation
Alsuyayfi, Shanar Shafi, Ja'Afar, Roslan, Said, Rasidah Mohd and Albada, Ali (2023, December 1). The mediating role of firm risk: The case of the insurance sector in Saudi Arabia. In the Journal of Risk Management in Financial Institutions, Volume 17, Issue 1. https://doi.org/10.69554/ARGK1038.
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