As the business world grows in complexity, business leaders are resorting to a robust risk management approach known as enterprise risk management (ERM). ERM is a systematic approach to holistically managing an organisation’s risks. Since its inception, scholars have been paying much attention to ERM implementation, with a particular focus on identifying its key determinants. Therefore, this study provides a comprehensive literature review on the determinants of ERM adoption. Research articles were distilled from Google Scholar and Scopus databases between 2003 and 2023. The existing literature highlights that firm size, institutional ownership, type of industry, profitability and the presence of a Big Four audit firm are key determinants of ERM adoption. Their significant positive effect validates this. Additionally, scholars underscore the importance of industrial diversification, earnings volatility, and internal audits due to their positive coefficient estimates. However, the impact of financial leverage, asset opacity, international diversification and stock price volatility remains inconclusive. The study suggests essential gaps, including new determinants, emerging contexts and methodological gaps for future research. Again, variables such as organisational culture and context, environment, social and governance and regulation could be considered to advance knowledge on the determinants of ERM adoption.

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Keywords

Determinants; Enterprise Risk Management; Firm-level; Literature Review.