Conjoint Effects of Interacting Strategy-making Processes and Lines of Defense Practices in Strategic Risk Management: An Empirical Study

Torben Juul Andersen*, Johanna Sax, Alessandro Giannozzi

*Corresponding author for this work

Research output: Contribution to journalJournal articleResearchpeer-review


The ability to contain adverse effects of major risks under turbulent conditions and exploit the opportunities they present are fundamental concerns in strategic management and various institutions promote enterprise risk management (ERM) to deal with these challenges. Yet, our knowledge about how ERM affects performance and interacts with corporate strategy-making processes is limited. The ERM frameworks impose first and second lines of defense practices to integrate business operations and corporate risk oversight. Emergent strategies generate responsive initiatives and strategic planning coordinates updated actions. Hence, this study analyzes the conjoint effects of these ERM practices and strategy-making processes based on a large corporate sample and finds that ERM practices depend on strategy-making to attain effective risk outcomes. The application of ERM frameworks can, therefore, not be assessed in isolation, but must consider corporate strategy-making. This has implications for the way we conduct research on strategic risk management, how executives approach risk oversight and policy-makers impose formal risk governance requirements.
Original languageEnglish
Article number102164
JournalLong Range Planning
Issue number6
Number of pages21
Publication statusPublished - Dec 2022

Bibliographical note

Published online: 26 October 2021.


  • Dynamic capabilities
  • Emergent strategy
  • Enterprise risk management (ERM)
  • First line of defense (1LoD)
  • Operating units
  • Risk oversight
  • Second line of defense (2LoD)
  • Strategic planning

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