The role of risk management committee between risk-taking behavior and companies' performance

Purpose - This research aims to examine the moderating role of the existence of risk management committee between risk-taking behavior and companies' performance. Design/methodology/approach - Research sample includes 383 manufacturing company-year that listed on the Indonesian Stock Exchange period of 2017-2020. The risk-taking behavior includes the use of leverage, capital intensity, research and development intensity, and earnings uncertainty. The hypothesis test uses company fixed-effect regression. Findings - The result shows that risk management committee moderates the effect of risk-taking behavior on companies' performance. This research also finds the similar result when risk management committee and risk-taking behavior are examined on the future performance. In the further analysis, the result also finds that the expertise of risk management committee moderates the effect of risk-taking behavior on companies' performance. Originality/value - This research contributes to fill the previous gap of risk-taking behavior and companies' performance by considering the existence of risk management committee to promote oversight role on risktaking behavior. This research also contributes to give new evidence in Indonesia about the role of risk management committee to improve the benefits or to reduce the costs of risk-taking behavior.