Role of risk governance in promoting operational risk disclosure and performance: An asean-5 banking perspective

This paper aims to investigate the effect of risk governance on five-ASEAN banks operational risk disclosure and performance. The uniqueness of this paper lies in countries setting and risk governance index based on the most recent guideline of bank governance. This study uses 285 bank-year observations comprising hand-collected data for the period 2010-2014. The results suggest that, consistent with the agency and stakeholder theory, risk governance practices can encourage the banks tend to improve operational risk disclosure while to decrease their ROA and P/E. However, these practices can positively affect these performances if mediated by the operational risk disclosure quality. This means that risk governance practices will encourage managers to present operational risk disclosures quality to improve bank performance.