Effect of governance, risk management and compliance on a firm’s value (healthcare industry)
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Dec 20, 2022
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Abstract
A high firm’s value is one of the main goals of investors. Management will seek to optimize all factors that have the potential to increase the firm’s value, including the GRC component. The healthcare sector is one of the industries that has shown good performance in several years, including during the crisis due to the Covid-19 pandemic. This pandemic is considered a catastrophic event. Using the explanatory quantitative method, this research aims to prove the difference in the effect of GRC on firm value through two different conditions, before and after the pandemic. The firm’s value is proxied by Tobin's Q, and GRC is measured based on the Indonesian GRC Award scoring method. Through purposive sampling technique on the population of the healthcare industry, as many as 22 companies listed on the Indonesia Stock Exchange, this research took a sample of 11 companies with data sources from 2018 to 2021. The data was processed using a simple linear regression statistical model. The study results show that GRC positively affects firm value, with an explanatory level of 33.8% in pool data. Based on data segregation, the results show that the explanatory level during the pandemic period is more significant.
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How to Cite
Sembiring Kembaren, S. Y., Endro, G., & Pendrian, O. (2022). Effect of governance, risk management and compliance on a firm’s value (healthcare industry). Enrichment : Journal of Management, 12(5), 4076-4087. https://doi.org/10.35335/enrichment.v12i5.947
References
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Batenburg, Ronald & Neppelenbroek, Matthijs & Shahim, Abbas. (2014). A maturity model for governance, risk management, and compliance in hospitals. Journal of Hospital Administration. 3. http://dx.doi.org/10.5430/jha.v3n4p43.
Greenhalgh, T. 2020. Aligning Governance, Risk, and Compliance. Ahima. https://journal.ahima.org/aligning-governance-risk-andcompliance.
Hair, J. F., Black, W. C., Babin, B. J., & Anderson, R. E. (2019). Multivariate data analysis (8th ed.). Boston: Cengage.
Handoko, B. L., Riantono, I. E., & Gani, E. (2020) Importance and Benefit of Application of Governance Risk and Compliance Principle. Systematic Reviews in Pharmacy, 11 (9), 510-513. https://doi.org/10.31838/srp.2020.9.74
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Hoang Thanh Nhon, Bui Quang Thong & Ngo Quang Trung | (2020) The effects of intellectual capital on information communication technology firm performance: A moderated mediation analysis of environmental uncertainty, Cogent Business & Management, 7:1, 1823584, DOI: 10.1080/23311975.2020.1823584
Jagric, T., Grbenic, S.O. and Jagric, V. (2022). What drives the healthcare sector's economic impact? Evidence from European countries. International Journal of Health Governance, Vol. 27 No. 1, pp. 41-53. https://doi.org/10.1108/IJHG-05-2021-0043
Jogiyanto, Hartono. 2018. Metode Pengumpulan dan Teknik Analisis Data. Yogyakarta: Andi.
Krause, T.A. and Tse, Y. (2016). Risk management and firm value: recent theory and evidence. International Journal of Accounting & Information Management, Vol. 24 No. 1, pp. 56-81. https://doi.org/10.1108/IJAIM-05-2015-0027
Mazur, M., Dang, M., & Vega, M. (2021). COVID-19 and the march 2020 stock market crash. Evidence from S&P1500. Finance Research Letters, 38, 101690.
Mosadeghrad, Ali. (2013). Healthcare service quality: Towards a broad definition. International journal of health care quality assurance. 26. 203-19. 10.1108/09526861311311409.
Murdock, D.H. (2018). Governance, Risk Management, and Compliance (GRC). Auditor Essentials.
Oncu, Erdem (2021): The impact of COVID-19 on health sector stock returns. Published in: Administrative, Economics and Social Sciences Theory, Current Researches and New Trends 2021, Cetinje, Montenegro: IVPE. (2021): pp. 109-121.
Papazafeiropoulou, A., Spanaki, K. Understanding governance, risk and compliance information systems (GRC IS): The experts view. Inf Syst Front 18, 1251–1263 (2016). https://doi.org/10.1007/s10796-015-9572-3
Racz, N. and A. Seufert. (2014). “A frame of reference for the research of integrated governance, risk, and compliance (GRC).” In: International Conference on Communications and Multimedia Security (CMS 2010) (pp. 106–117). Linz, Austria.
Rasmussen M. 2018. Market Sizing, Forecasting, Analysis & Segmentation. GRC 20/20 Research, Phoenix, AZ.
Setiawan and Asbaniar. 2021. Analisis Kinerja Saham Pada Industri Farmasi Sebelum dan Setelah Adanya Pandemi Covid-19. Iqtisha Dequity. ISSN: 2622-6367
Spanaki, K., & Papazafeiropoulou, A. (2013). Analysing the governance, risk, and compliance (GRC) implementation process: primary insights. Proceedings of the 21st European conference on information systems (ECIS). Utrecht, Netherlands
Sugiyono (2017). Metode Penelitian Bisnis: Pendekatan Kuantitatif, Kualitatif, Kombinasi, dan R&D. Penerbit CV. Alfabeta: Bandung.
Virtyani, Mega & Muljaningsih, Sri & Asmara, Kiky. (2021). Studi Peristiwa Penetapan COVID-19 Sebagai Pandemi Oleh World Health Organization Terhadap Saham Sektor Healthcare di Bursa Efek Indonesia. Jurnal SEKURITAS (Saham, Ekonomi, Keuangan dan Investasi). 4. 240. http://dx.doi.org/10.32493/skt.v4i3.10608.
Alisyah, W., & Susilowati, L. (2022). Comparison of Financial Performance in Health Sector Companies Listed on the Indonesia Stock Exchange before and During the Covid-19 Pandemic. Jurnal Keuangan dan Perbankan, 26(1), 62-74. https://doi.org/10.26905/jkdp.v26i1.6816
Arora, A., & Sharma, C. (2016). Corporate governance and firm performance in developing countries: evidence from India. Corporate Governance, 16, 420-436.
Badulescu, A., Badulescu, D., Saveanu, T., & Hatos, R. (2018). The Relationship between Firm Size and Age, and Its Social Responsibility Actions—Focus on a Developing Country (Romania). Sustainability, 10(3), 805. MDPI AG. Retrieved from http://dx.doi.org/10.3390/su10030805
Batenburg, Ronald & Neppelenbroek, Matthijs & Shahim, Abbas. (2014). A maturity model for governance, risk management, and compliance in hospitals. Journal of Hospital Administration. 3. http://dx.doi.org/10.5430/jha.v3n4p43.
Greenhalgh, T. 2020. Aligning Governance, Risk, and Compliance. Ahima. https://journal.ahima.org/aligning-governance-risk-andcompliance.
Hair, J. F., Black, W. C., Babin, B. J., & Anderson, R. E. (2019). Multivariate data analysis (8th ed.). Boston: Cengage.
Handoko, B. L., Riantono, I. E., & Gani, E. (2020) Importance and Benefit of Application of Governance Risk and Compliance Principle. Systematic Reviews in Pharmacy, 11 (9), 510-513. https://doi.org/10.31838/srp.2020.9.74
Haugh, Todd. 2019. Harmonizing Governance, Risk Management, and Compliance Through the Paradigm of Behavioral Ethics Risk, 21 J. BUS. L. 873 (2019). Available at: https://scholarship.law.upenn.edu/jbl/vol21/iss4/4
Hoang Thanh Nhon, Bui Quang Thong & Ngo Quang Trung | (2020) The effects of intellectual capital on information communication technology firm performance: A moderated mediation analysis of environmental uncertainty, Cogent Business & Management, 7:1, 1823584, DOI: 10.1080/23311975.2020.1823584
Jagric, T., Grbenic, S.O. and Jagric, V. (2022). What drives the healthcare sector's economic impact? Evidence from European countries. International Journal of Health Governance, Vol. 27 No. 1, pp. 41-53. https://doi.org/10.1108/IJHG-05-2021-0043
Jogiyanto, Hartono. 2018. Metode Pengumpulan dan Teknik Analisis Data. Yogyakarta: Andi.
Krause, T.A. and Tse, Y. (2016). Risk management and firm value: recent theory and evidence. International Journal of Accounting & Information Management, Vol. 24 No. 1, pp. 56-81. https://doi.org/10.1108/IJAIM-05-2015-0027
Mazur, M., Dang, M., & Vega, M. (2021). COVID-19 and the march 2020 stock market crash. Evidence from S&P1500. Finance Research Letters, 38, 101690.
Mosadeghrad, Ali. (2013). Healthcare service quality: Towards a broad definition. International journal of health care quality assurance. 26. 203-19. 10.1108/09526861311311409.
Murdock, D.H. (2018). Governance, Risk Management, and Compliance (GRC). Auditor Essentials.
Oncu, Erdem (2021): The impact of COVID-19 on health sector stock returns. Published in: Administrative, Economics and Social Sciences Theory, Current Researches and New Trends 2021, Cetinje, Montenegro: IVPE. (2021): pp. 109-121.
Papazafeiropoulou, A., Spanaki, K. Understanding governance, risk and compliance information systems (GRC IS): The experts view. Inf Syst Front 18, 1251–1263 (2016). https://doi.org/10.1007/s10796-015-9572-3
Racz, N. and A. Seufert. (2014). “A frame of reference for the research of integrated governance, risk, and compliance (GRC).” In: International Conference on Communications and Multimedia Security (CMS 2010) (pp. 106–117). Linz, Austria.
Rasmussen M. 2018. Market Sizing, Forecasting, Analysis & Segmentation. GRC 20/20 Research, Phoenix, AZ.
Setiawan and Asbaniar. 2021. Analisis Kinerja Saham Pada Industri Farmasi Sebelum dan Setelah Adanya Pandemi Covid-19. Iqtisha Dequity. ISSN: 2622-6367
Spanaki, K., & Papazafeiropoulou, A. (2013). Analysing the governance, risk, and compliance (GRC) implementation process: primary insights. Proceedings of the 21st European conference on information systems (ECIS). Utrecht, Netherlands
Sugiyono (2017). Metode Penelitian Bisnis: Pendekatan Kuantitatif, Kualitatif, Kombinasi, dan R&D. Penerbit CV. Alfabeta: Bandung.
Virtyani, Mega & Muljaningsih, Sri & Asmara, Kiky. (2021). Studi Peristiwa Penetapan COVID-19 Sebagai Pandemi Oleh World Health Organization Terhadap Saham Sektor Healthcare di Bursa Efek Indonesia. Jurnal SEKURITAS (Saham, Ekonomi, Keuangan dan Investasi). 4. 240. http://dx.doi.org/10.32493/skt.v4i3.10608.