Risk Communication and Financial Performance in Higher Education: The Mediating Role of Enterprise Risk Management

Abstract

This study investigates the effect of risk communication on the financial performance of Malaysian public higher education institutions, with the implementation of enterprise risk management (ERM) serving as a mediating variable. Drawing on social exchange theory, a conceptual framework was developed in this study. Primary data were collected through an online cross-sectional survey of risk committee members, internal auditors, and top management (n = 212) across 20 institutions, selected using a multistage sampling approach. Covariance-based structural equation modeling (CB-SEM) confirmed that effective risk communication significantly enhances financial outcomes, both directly and through ERM implementation. Findings underscore ERM’s pivotal mediating role in translating communication into financial resilience. The study furnishes higher-education leaders with actionable strategies for sustaining institutional financial stability through integrated risk communication and ERM frameworks.