BEYOND STRUCTURE: RE-EVALUATING BOARD RISK COMMITTEE EFFECTIVENESS AND FINANCIAL PERFORMANCE IN EMERGING MARKETS

Abstract

This study examined whether functional attributes of the Board Risk Committee, specifically independence and diligence, significantly influenced the financial performance of firms operating in emerging markets, addressing long-standing concerns that structural compliance has not translated into meaningful performance outcomes. The objective was to reassess the value relevance of Board Risk Committee independence and meeting frequency in driving corporate financial performance measured by Return on Assets.The study adopted an ex-post facto research design and utilised secondary panel data drawn from annual reports of 50 listed firms, applying descriptive statistics, correlation analysis, and a comprehensive set of diagnostic tests. Initial Ordinary Least Square, fixed-effects, and random-effects estimations produced non-normal residuals, heteroskedasticity, and outlier sensitivity; thus, robust regression was employed as the final estimator to generate reliable coefficients.The findings revealed that Board Risk Committee independence had a positive and statistically significant effect on Return on Assets, while Board Risk Committee diligence (meeting frequency) showed an insignificant relationship, indicating that functional oversight, not structural activity, drives financial performance. Based on these results, the study recommended that regulators strengthen independence guidelines, boards prioritise substantive oversight over meeting frequency, and investors treat BRC independence as a credible governance signal.