Risk Management Committees in Malaysia: Exploring Structural Variation and Research Opportunities

Abstract

This study aims to identify and describe the types of risk management committees established by publicly listed companies in Malaysia, particularly in the context of post-pandemic recovery and enhanced governance expectations under MCCG 2021. Using a descriptive quantitative approach, the research analysed 729 company-year observations of companies listed on the main board of Bursa Malaysia between 2021 and 2023. Annual reports and corporate governance disclosures were manually reviewed to determine the presence and structure of RMCs. The findings reveal a gradual increase in RMC adoption from 76% in 2021 to 80% in 2023. However, only 30% of companies adopted the recommended standalone RMC structure, while 29% preferred a combined RMC-Audit Committee model. Smaller proportions established RMCs integrated with other board committees (9%) or at the management level (12%). The results indicate that while many companies are aligning with governance reforms, a significant portion still rely on traditional or hybrid structures, reflecting varied levels of commitment and resource allocation to formal risk oversight. This study contributes to the corporate governance literature by providing updated empirical evidence on RMC adoption trends and highlights areas for future research, including the effectiveness of different RMC structures, the interplay of RMC characteristics, and the behavioural dynamics of committee members. The study contributes to the understanding of RMC structures in practice by documenting their diversity. It also provides a basis for further research on how different RMC designs may influence risk disclosure and governance outcomes.