The Role Of Corporate Governance In Enhancing Enterprise Risk Management (ERM) Effectiveness In Saudi Insurance Companies

Abstract

This study investigates the role of corporate governance (CG) in enhancing the effectiveness of Enterprise Risk Management (ERM) in Saudi insurance companies. Despite the increasing importance of risk management in the insurance sector, empirical evidence on how governance mechanisms influence ERM in Saudi Arabia remains limited. Using a quantitative approach, data were collected from a survey of senior managers and board members of listed insurance companies. Structural equation modeling (SEM) was employed to analyze the relationships between corporate governance components, ERM effectiveness, and organizational performance. The findings indicate that effective governance mechanisms, including board independence, risk committees, and transparency, significantly improve ERM implementation, which in turn positively impacts organizational performance and sustainability. This study highlights the mediating role of ERM between corporate governance and performance outcomes, providing practical implications for policy makers and managers to strengthen risk management practices in the Saudi insurance sector