LONDON, 13 November 2008 - Businesses are failing to implement risk management within their day-to-day operations due to insufficient clarity of ownership of the process and the risks themselves, warns Aon Global Risk Consulting (AGRC). In response to this emerging business issue, the risk consultant has developed 'e-GAP'^TM as a management tool to help organisations move beyond paying lip service to enterprise risk management (ERM) by developing plans but never embedding them. 

While companies are now commonly proficient at identifying the risks that face their operation, the lack of clarity surrounding ownership of the risks and what represents an acceptable level of business risk means it is often difficult to establish Key Performance Indicators (KPIs) to demonstrate successful implementation. It is therefore impossible to demonstrate a return on investment on ERM efforts. This situation means the ERM process can often fall into disrepute and is maintained simply as a regulatory 'band aid.'

Alex Hindson, head of enterprise risk management at Aon Global Risk Consulting, comments:
"There is a real gap between creating an ERM programme and actually embedding it within a business. For example, risks are identified and reported to executive management but little is done to address them.  The missing step is ensuring a risk culture exists across the organisation to ensure managers feel accountable for acting upon this information.

"Demonstrating a return on investment and ensuring that an ERM programme is being embedded in management decision making is key at this time of economic turmoil, particularly when it comes to looking at cost and access to credit.

"This is especially true now that Standard & Poor’s have started to include the evaluation of ERM effectiveness in their credit ratings of non-financial institutions. Being able to clearly articulate their ERM framework and explain how it impacts strategic decision-making will be key to organisations being able to protect or enhance their credit ratings."

To understand the short-falls of their ERM programme, organisations using Aon's e-GAP^TM solution can:

1. Establish a base line of current activities and ensure they represent a coherent  and efficient framework compatible with best practices;
2. Set clear objectives for the ERM programme with measurable success criteria;
3. Clearly define the governance regime and accountabilities within the ERM process across the organisation;
4. Establish a coherent route map over 18-24 months, based on the gap analysis, to drive the ERM programme to deliver meaurable value to the organisation; and
5. Effectively engage internal stakeholders to ensure the change management aspects of the ERM programme are being recognised and managed effectively.

Ends

For more information contact:
David Skapinker
020 7505 7478
David.skapinker@aon.co.uk
http://aon.mediaroom.com

About Aon
Aon Corporation (NYSE: AOC) is the leading global provider of risk management services, insurance and reinsurance brokerage, and human capital consulting. Through its 36,000 colleagues worldwide, Aon readily delivers distinctive client value via innovative and effective risk management and workforce productivity solutions. Our industry-leading global resources, technical expertise and industry knowledge are delivered locally through more than 500 offices in more than 120 countries. Aon was named the world's best broker by Euromoney magazine's 2008 Insurance Survey. In 2008, Aon ranked highest on the Business Insurance ranking of the world's largest insurance brokers based on commercial retail, wholesale, reinsurance and personal lines brokerage revenues. Aon also was ranked by A.M. Best as the number one insurance broker based on brokerage revenues in 2007 and 2008, and was voted best insurance intermediary, best reinsurance intermediary, and best employee benefits consulting firm in 2007 and 2008 by the readers of Business Insurance.  Sign up to receive Aon news alerts by email or RSS feed at: http://aon.mediaroom.com/index.php?s=58.

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