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Member, Beacon International Group, Ltd.
CHICAGO—Aon Risk Solutions, the global risk management business of Chicago-based Aon Corp., says its Aon Risk Maturity Index has demonstrated a positive relationship between the maturity of an organization's risk management and its financial performance.
The Aon Risk Maturity Index is a proprietary tool Aon launched earlier this year with the University of Pennsylvania's Wharton School of Business in Philadelphia. The index is intended to help risk and finance leaders assess the development of their organizations' risk management structure and implementation.
Using preliminary data for publicly trade companies ranging from mid-size businesses to Fortune 100 companies, Christopher D. Ittner, Ernst & Young professor of accounting at Wharton, found a “statistically significant relationship” between risk maturity ratings and financial performance, Aon said in a statement.
The index is based on assessing areas such as corporate governance, management decision processes and risk management processes. Aon and Wharton analyze organizations’ responses to identify activities associated with improved financial performance.
According to Aon, the questions on which the index is based are intended to align with the following risk maturity areas:
• Board understanding and commitment to risk management
• Executive-level risk management stewardship
• Risk communication
• Risk culture: Engagement and accountability
• Risk identification
• Stakeholder participation in risk management
• Risk information and decisionmaking processes
• Integrating risk management and human capital processes
• Risk analysis and quantification to understand risk and demonstrate value
• Risk management focus on value creation