Abstract:

Risk management is acknowledged as a key aspect of the effective corporate governance of a successful organization. The purpose of this study is to explore the adoption status of risk management practices and its effects on company’s ethical climate and performance. In particular, the research shed light on the link between risk management practices, ethical climate and organizational performance among public sector employees. Data was collected from 312 employees working in public sector organizations in Abu Dhabi, the capital of United Arab Emirates, and Structural Equation Modeling was used to test the proposed hypotheses. The findings demonstrate that risk management practices and ethical climate directly affects the organizational performance. The study is a novel attempt to combine risk management practices with the ethical climate and contributes to the literature by being one of the first to explore within a Middle Eastern context, and will offer important implications for theory and practice.