Enterprise risk management and internal control system in the framework of corporate governance principles in family companies: TRC3 region application

Family companies have a significant share in the economic structure. Therefore, it is also important in national and international fields. The foundation of being a sustainable family company is based on institutionalization. The concept of institutionalization refers to the systematization of the necessary procedures. The process of carrying out institutionalization efforts can be expressed as corporate governance. The success of corporate governance is based on corporate governance principles that enable stakeholders to observe their rights and corporate risk management and internal control systems that support this process. The study aims to determine the relationships between corporate governance principles, corporate risk management and internal control system in family companies. Survey method was used in the study. The survey was based on family companies located in the TRC3 region (Batman, Mardin, Siirt, Sirnak) provinces. 93 company owners participated in the survey. The data were analyzed with SPSS 25.0 package program. According to the results of the study, a relationship was detected between corporate governance principles, corporate risk management and internal control systems. Also, results showed that internal control system has an intermediary role between corporate risk management and corporate governance principles. In addition, it has been determined that there are differences between corporate structures, corporate governance principles, corporate risk management and internal control system. It was concluded that the companies participating in the survey did not give sufficient importance to the corporate governance principles, but they underlined the principles of corporate risk management and were highly successful in internal control system applications. Within the framework of the data obtained from the research, it is suggested that family companies should give more space to corporate governance principles, corporate risk management and internal control system practices within the scope of institutionalization efforts. Keywords: Family Company, Corporate Governance Principles, Corporate Risk Management, Internal Control System.