THE EFFECT OF ENTERPRISE RISK MANAGEMENT (ERM), ENVIRONMENT, SOCIAL, AND GOVERNANCE (ESG) AND FREE CASH FLOW (FCF) ON FIRM PERFORMANCE

Furqan, Yasmin Ananta (2025) THE EFFECT OF ENTERPRISE RISK MANAGEMENT (ERM), ENVIRONMENT, SOCIAL, AND GOVERNANCE (ESG) AND FREE CASH FLOW (FCF) ON FIRM PERFORMANCE. S1 thesis, Universitas Andalas.

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Abstract

The purpose of this study is to look at how business performance is affected by Enterprise Risk Management (ERM), Environmental, Social, and Governance (ESG), and Free Cash Flow (FCF). Using purposive sampling, 43 non-financial companies were selected for this study from a population of companies listed on the Indonesia Stock Exchange (IDX) between 2020 and 2023. Return on Equity (ROE), which measures the company's financial success, and Tobin's q, which measures its market performance, combine to generate the company's overall performance. The study's findings show that financial performance as measured by ROE is significantly impacted by ERM, ESG, and FCF. Although ERM and FCF have no discernible effect on market performance, ESG also significantly improves it as measured by Tobin's q. The only control variable that has a substantial impact on this study is firm size. Keywords: ERM, ESG, Free Cash Flow, Firm Performance, ROE, Tobin’s q

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