Aon Global Risk Consulting, the risk consulting business of Aon plc (NYSE:AON), the leading global provider of risk management and human resource consulting and outsourcing, in collaboration with the Wharton School of the University of Pennsylvania, today released its fourth edition of the Aon Risk Maturity Index Insight Report. The findings of the report evidence a direct relationship between strong risk management practices and superior operating performance for organizations.
The 2015 Report analyzes the inverse relationship between a higher Risk Maturity Rating and lower stock price volatility as well as a direct relationship between a higher Risk Maturity Rating and superior operational financial performance. Additionally, the report’s findings reinforced the relationship between a higher Risk Maturity Rating and the relative resilience of an organization’s stock price in volatile equity, currency, and commodity market scenarios.
“This year, we focused on identifying specific best practices around how organizations can develop a cross-functional understanding of risk to improve their risk maturity and ultimately help boost their financial results,” said Kieran Stack, managing director at Aon Global Risk Consulting. “Our data confirms that organizations that successfully focus on improving this set of distinct risk-related factors as well as utilize advanced quantitative risk management techniques are more aware of their risk exposure and have enhanced agreement and alignment on required actions to help successfully realize superior performance.”
The specific strategies organizations should implement to effectively understand and manage risk are outlined in several new key findings, including:
Communication of risk management strategies, objectives and practices
Collaboration in executing risk based practices across risk-based functions
Consensus on strategy for cross-functional risks
The report also finds that organizations that successfully utilize risk quantification techniques experience greater transparency into the organization’s specific risk exposure and risk appetite – ultimately boosting the company’s operational performance.
“In today’s dynamic economic and geopolitical landscape, risks are becoming more interconnected. The ability for organizations to understand and manage this increasing interconnectivity and develop the organizational governance and processes are imperative to their financial and operational well-being,” said Theresa Bourdon, group managing director at Aon Global Risk Consulting. “Aon’s fourth edition of the Risk Maturity Index Insight Report can help organizations increase their understanding of risk and adapt their risk frameworks to be more impactful on their bottom line.”