Enterprise risk management e o custo do capital próprio

: uma análise empírica à realidade portuguesa

Abstract

In recent years, several economic agents chose to face the emergent complexity of risks and regulatory models, transforming a traditional risk management approach into a broader one, called Enterprise Risk Management (ERM). This methodology is a process that manages all risks in an integrated and holistic way, controlling and coordinating any risks that organizations could face. This master’s final assignment (MFA) intends to assess the link between the Enterprise Risk Management Framework and firm’s cost of equity, as well as to find the determinants that influence the adoption of this risk management methodology. Thus, 35 companies from the non-financial sector that are part of PSI-All Share from Lisbon Stock Exchange were analysed, for a period of 10 years (2010-2019). The results show that the ERM adoption has a negative impact on the organization’s cost of equity of, approximately, 1%, when all the explanatory variables remain constant. Regarding to the determinants of the adoption of an ERM approach, companies’ size and financial slack are elements that positively affect the choice of ERM. These results point out that the reduction in the cost of equity is one of the alternatives for the value creation of entities, when they adopt ERM systems.

Date of Award	6 Jul 2021
Original language	Portuguese
Awarding Institution	Universidade Católica Portuguesa
Supervisor	Ricardo Cunha (Supervisor)