RISK MANAGEMENT AND COMPANY SIZE: A SURVEY OF ITALIAN PRIVATE COMPANIES

This paper aims at studying the state of the art of enterprise risk management (ERM) within private firms, and it improves the knowledge of how firm size influences risk department settlement decisions inside micro, small, medium and big unlisted corporations. This paper contributes to the literature with an empirical analysis of whether private firms consider it worth managing risk using a dedicated risk management department although it is not imposed by any mandatory rule or by self-regulation. Submitting a questionnaire to a sample of Italian unlisted companies, the authors find that 67% of respondents have no risk management system and only 10% are planning to create one. A real risk-management culture still needs to be developed amongst private entities. Significant opportunities remain for medium and big organizations to strengthen underlying processes for identifying and assessing the key risks that the entity normally faces.