sustainable business practices while being responsive to emerging trends, risks and
opportunities.
Companies are now recognised that their business activities pose environmental
and social impacts to the societies. As such, environmental and social risk are greatly
matters to the companies that embrace sustainable business practices. They believed
that both risks are significantly affect their survival (Mateescu et al. 2016). SRM is
essential for company survival. Hence, many companies have started to integrate
sustainability into their ERM strategies following numerous environmental disasters
threatening their survival (Beasley and Showalter 2015). As a matter of fact, an
increasing number of investors and other stakeholders are demanding company to
address sustainability risksfollowing global concerns on sustainability issues. Ortizde-Mandojana and Bansal (2016) postulated that companies that embraced sustainability practices in their business strategy are capable of managing risks better,
experience lower financial volatility, and record higher sales growth This simply
relates that sustainable companies can grow profitably in a long term and cater
diverse stakeholder needs while managing risks. Therefore, SRM present opportunities to engineer a win-win situation for both businesses and stakeholders.
Studies have identified several determinants that encouraged SRM implementation in various sectors which are good business practices (Das 2014), occurrences of
unexpected events (Taleb et al. 2009), stakeholder pressure (Kytle and Ruggie
2005), regulatory compliance (Benn et al. 2009), corporate reputation (Jacob
2012), operational efficiency (Nigam and Ramos 2011), and long-term shareholder
return (Przychodzen and Przychodzen 2013). Whilst, Shrivastava and Addas (2014)
indicated that corporate governance characteristic such as board discussion on risk
has a significant influence on the company sustainability performance. Apparently,
SRM determinants could be drawn either externally outside the organisation or
internally inside the company.
. For a company to successfully implement SRM programme, factors such as
compliance, risk governance, risk culture, and leadership requires attention of the
management. Companies are expected to pay more devotion to enhance board and
senior management leadership and stakeholder engagement to ensure the effectiveness of SRM in the company. In addition, commitment to comply with regulatory
requirements also supports SRM programme. Compliance is essential to good
business practices and deliberate effort to meet the stakeholder needs, hence encourages company to address environmental and social risks effectively (Rahardjo et al.
2013). Also, risk governance which applies the principle of good governance is
crucial to prepare for unexpected risks arising from sustainability issues (Renn,
2014). Furthermore, risk culture is foundational to efficient risk management practices. Risk culture has to be embedded across the organisation to enhance employees
understanding and awareness in regards to the risks threatening company survival
(Lam 2017).
12 Meeting the Stakeholder Needs and Sustaining Business Through. . .
199
opportunities.
Companies are now recognised that their business activities pose environmental
and social impacts to the societies. As such, environmental and social risk are greatly
matters to the companies that embrace sustainable business practices. They believed
that both risks are significantly affect their survival (Mateescu et al. 2016). SRM is
essential for company survival. Hence, many companies have started to integrate
sustainability into their ERM strategies following numerous environmental disasters
threatening their survival (Beasley and Showalter 2015). As a matter of fact, an
increasing number of investors and other stakeholders are demanding company to
address sustainability risksfollowing global concerns on sustainability issues. Ortizde-Mandojana and Bansal (2016) postulated that companies that embraced sustainability practices in their business strategy are capable of managing risks better,
experience lower financial volatility, and record higher sales growth This simply
relates that sustainable companies can grow profitably in a long term and cater
diverse stakeholder needs while managing risks. Therefore, SRM present opportunities to engineer a win-win situation for both businesses and stakeholders.
Studies have identified several determinants that encouraged SRM implementation in various sectors which are good business practices (Das 2014), occurrences of
unexpected events (Taleb et al. 2009), stakeholder pressure (Kytle and Ruggie
2005), regulatory compliance (Benn et al. 2009), corporate reputation (Jacob
2012), operational efficiency (Nigam and Ramos 2011), and long-term shareholder
return (Przychodzen and Przychodzen 2013). Whilst, Shrivastava and Addas (2014)
indicated that corporate governance characteristic such as board discussion on risk
has a significant influence on the company sustainability performance. Apparently,
SRM determinants could be drawn either externally outside the organisation or
internally inside the company.
. For a company to successfully implement SRM programme, factors such as
compliance, risk governance, risk culture, and leadership requires attention of the
management. Companies are expected to pay more devotion to enhance board and
senior management leadership and stakeholder engagement to ensure the effectiveness of SRM in the company. In addition, commitment to comply with regulatory
requirements also supports SRM programme. Compliance is essential to good
business practices and deliberate effort to meet the stakeholder needs, hence encourages company to address environmental and social risks effectively (Rahardjo et al.
2013). Also, risk governance which applies the principle of good governance is
crucial to prepare for unexpected risks arising from sustainability issues (Renn,
2014). Furthermore, risk culture is foundational to efficient risk management practices. Risk culture has to be embedded across the organisation to enhance employees
understanding and awareness in regards to the risks threatening company survival
(Lam 2017).
12 Meeting the Stakeholder Needs and Sustaining Business Through. . .
199