Global Journal of Management and Business Research, A: Administration and Management, Volume 23 Issue 2

Enterprise Risk Management in Designing Meta-Regulation under Risk-based Regulatory Strategy: An Empirical Evidence from Financial Regulation 48 Global Journal of Management and Business Research Volume XXIII Issue II Version I Year 2023 ( ) A © 2023 Global Journals regulatory toolkit to design the risk-based regulatory framework and achieve the regulatory goals. The design meta-regulatory approach using ERM under risk-based regulation is drawn in Figure 3. Figure 3: Design of Meta-Regulatory Approach using ERM under Risk-based Regulation Thus, the evidence reflects that the financial regulation is moved away from compliance-based regulation to risk-based regulation incorporating the meta-regulation. The development of the enforced meta- regulation based on ERM gives a risk-based approach to regulating the firms with a flavour of system /management-based and performance/outcome-based approaches. With this mechanism, regulators expect that regulated firms will identify risks and devise internal control systems and continuously evaluate the efficacy of such self-regulation and incrementally improve them in light of the evaluation. Therefore, it can be argued that ERM strongly ties with meta-regulation and risk-based regulation. IV. C onclusion The shift towards risk-based regulation and meta-regulation has attracted a great deal of interest, while this move is undoubtedly a complex and multifactorial phenomenon. However, the effectiveness of process-oriented regulation in the domain of flexible regulation is subject to debate. The enforcement of self- regulatory models is also always a matter of debate (1). The global financial crisis 2007–2009 also uncovered the key limitations of flexible regulations and the regulatory capacity (26). Further, meta-regulation is not perfect and unproblematic. Despite this, the relevance of risk-based regulation and meta regulation is growing to the regulators across the globe in diverse areas. The meta- regulatory approach is an upright choice to the regulators in designing risk-based regulation (9), although it is not a naturally grown regulation. The empirical literature is limited to explore how meta- regulation can be designed using an emerging regulatory innovation and risk-based regulation to achieve the regulatory aims. This article contributes to this research gap. This article draws a connection between risk- based regulation and meta-regulation. It reveals a “regulatory mix” combining these two flexible regulations into one manifesto using a contemporary regulatory innovation to promote regulatory governance in financial regulation. It is stated in the regulation scholarship that a right regulatory mix is a promising regulatory tool (12). Besides, a hybrid nature of regulation is potentially valuable(4). Therefore, the study’s context provides empirical evidence to draw the design of a “regulatory mix” to achieve the regulatory goals in financial regulation. This study reflects that ERM has emerged as a robust regulatory innovation with the feature of self- regulation in designing the meta-regulatory approach to achieve the risk-based regulatory goals. The sectoral risk management reform based on ERM philosophy enforces the regulated firms to implement self- regulation’s structural and operational architecture. Under the meta-regulatory approach, this ERM based self-regulation is enrolled in the regulatory process. With the enhanced institutional capacity and advanced tools and techniques, the regulator administers the regulated firms’ self-regulation and attains risk-based regulatory goals intensely relying on such self-regulation. Thus, a new dynamic has evolved in ERM philosophy that enforce to bring out the inside of the regulated firms and act as a meta-regulatory toolkit in the risk-based regulatory framework. This paper makes three contributions in major. First, this paper contributes to regulation scholarship, in particular to the “flexible regulation” and “new governance” landscape, including ERM literature by