Enterprise Risk Management And Corporate Liquidity Of Firms Listed On The Premium Board Of Nigeria Exchange
Dr Daniel James Egileoniso
Department of Finance, Faculty of Administration and Management, Rivers State University, Nkpolu-Oroworukwo, Port Harcourt.
Dr Mark Bekweri Edeh
Department of Finance, Faculty of Administration and Management, Rivers State University, Nkpolu-Oroworukwo, Port Harcourt.
Dr Marshal Iwedi
Department of Finance, Faculty of Administration and Management, Rivers State University, Nkpolu-Oroworukwo, Port Harcourt.
Keywords: Enterprise Risk Management, Corporate Liquidity, Quoted Firms, Premium Board, Nigeria Exchange Group
Abstract
This study investigates the effect of enterprise risk management (ERM) practices on corporate liquidity of firms listed on the Premium Board of the Nigerian Exchange Group over the period 2015–2024. Employing a panel data design and a census sampling approach covering eight listed firms, the study integrates cross-sectional and time-series data to control for firm-specific heterogeneity and temporal variations. Secondary data were sourced from annual reports and the NGX factbook, with Net Cash Flow (NCF) as a proxy for corporate liquidity. Independent variables included Enterprise Risk Assessment (ERA), Enterprise Risk Control (ERC), Enterprise Risk Monitoring (ERM), and Enterprise Risk Transfer (ERT). Panel regression analysis using the Ordinary Least Squares (OLS) method was employed to examine the relationship between ERM components and liquidity. Findings reveal that ERA significantly and negatively affects liquidity, indicating that extensive risk assessment may temporarily tie up cash resources. Conversely, ERC positively and significantly enhances liquidity, highlighting the importance of operational risk mitigation in safeguarding cash flows. ERM and ERT showed positive but statistically insignificant effects, suggesting that their impact is more strategic and long-term. The model explained approximately 71% of the variation in corporate liquidity, demonstrating the strong explanatory power of ERM practices. The study concludes that effective ERM, particularly risk control, is critical for maintaining corporate liquidity and financial stability. It recommends that firms prioritize actionable risk control measures, balance risk assessment with operational efficiency, and integrate monitoring and risk transfer strategies as complementary long-term practices. Adopting a holistic ERM framework aligned with corporate financial objectives can enhance liquidity and shareholder value creation.