Measuring the effectiveness of institutional risk management practices in supporting financial sustainability: Evidence from Saudi Bank

This paper aims to develop a model that links indicators of the effectiveness of institutional risk management practices with the achievement of financial sustainability, in the context of the recent changes and circumstances witnessed in the Saudi business environment. For businesses and financial institutions, achieving financial sustainability is crucial, particularly in view of growing economic unpredictability and a wider range of risks. This study looks at how the Enterprise Risk Committee (ERC) can successfully identify, evaluate, and mitigate risks in order to support financial sustainability. Additionally, it looks at how the ERC influences strategic decision-making, corporate governance, and regulatory compliance, which in turn affects important financial performance metrics including profits per share (EPS), return on equity (ROE), and return on assets (ROA). The study examines data from ten banks using a descriptive analytical approach to evaluate the connection between financial sustainability and ERC attributes including committee size, meeting frequency, and member independence. The findings emphasize the significance of proactive risk management in bank governance by showing a strong correlation between ERC effectiveness and financial sustainability. The article includes suggestions for improving the efficacy of the ERC to guarantee long-term financial sustainability as well as actual evidence on the importance of the ERC in boosting financial resilience.