The Role of Risk Management in Increasing Company Value: An Analysis from the Perspective of Risk, Profitability, and Company Size
Keywords:
Risk Management, Company Value, Profitability, Company Size, Risk DisclosureAbstract
This research aims to analyze the role of risk management in increasing company value through three main perspectives, namely corporate risk, profitability, and company size. The research approach was conducted using a literature study of eight scientific articles relevant to the fields of risk management, corporate governance, and financial performance. The results of the study indicate that risk management plays a strategic role in shaping corporate value, but this influence is greatly affected by the quality of implementation and transparency of risk disclosure. Comprehensive risk disclosure not only helps companies identify and mitigate potential losses, but also sends positive signals to investors and stakeholders, thereby improving market perception. Furthermore, this study found that profitability is the main pathway explaining how risk management can increase company value. Companies that are able to control risk effectively tend to have better operational efficiency, which ultimately increases profitability and company value. On the other hand, company size has been shown to strengthen risk management effectiveness because large companies have more adequate resources, governance, and oversight systems. Therefore, this study confirms that risk management is not only an internal control tool but also a strategic instrument in creating sustainable corporate value.
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