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Aon/Wharton School report finds that companies with higher Risk Maturity Rating and greater board oversight realize superior operational financial performance
Study also finds direct relationship between risk-based forecasting and planning and firm volatility and earnings predictability

CHICAGO – 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, released its Aon Risk Maturity Index Insight Report, October 2014. This year’s report indicates six main findings:

  1. Confirmation of past analysis on the inverse relationship between a higher Risk Maturity Rating and lower stock price volatility, and a direct relationship between a higher Risk Maturity Rating and superior operational financial performance
  2. Confirmation of past analysis on the relationship between a higher Risk Maturity Rating and the relative resilience of an organization’s stock price in the immediate aftermath of significant risk events
  3. Identification that the 2013/2014 bull equity market environment may have an equalizing effect on an organization’s stock price and create a false sense of security around the need to invest in a robust, holistic risk management approach.
  4. Introduction of new findings that evidence  a correlation between board risk oversight practices  and risk maturity
  5. Groundbreaking new research showing  a direct relationship between risk-based forecasting and planning and firm volatility and earnings predictability
  6. Introduction of cross-over analysis to Aon’s Global Risk Management Survey that indicates while organizations appear to identify similar opportunities and risks an organization’s level of planning, preparedness and response to these risks is distinctly different.

The report was developed as a means of driving marketplace insight on the relationship between an organization’s risk maturity and factors that drive organizational performance. This edition of the report confirmed findings from previous analyses, which found that more mature risk management practices directly correlate to stronger financial results and organizational and stock price resiliency in response to significant risk events.

“The findings of the Risk Maturity Index – new insights and confirmed prior analysis – emphasize the importance of comprehensive organizational risk management practices in a dynamic, challenging economic environment,” said Theresa Bourdon, group managing director at Aon Global Risk Consulting. ”Our insights help organizations better understand their organizational risk approach and framework, as well as the influence that risk management has in helping business leaders  respond to an inevitably changing business landscape.”

Kieran Stack, managing director at Aon Global Risk Consulting and Aon Risk Maturity Index project leader, added, “Strong board risk oversight and sophisticated risk-based forecasting and planning practices are critical components of a robust risk management framework and approach. This fact is supported by our findings. As organizations continue to evolve and face changing economic conditions, understanding and working to integrate these practices into overall organizational strategy will be vital to success.”   

About Risk Maturity Index

The award-winning Aon Risk Maturity Index tool was developed by Aon in partnership with the Wharton School at the University of Pennsylvania. It is designed to empower risk and finance leaders to assess the maturity of their organization’s risk management structure and provide insight to support its continued development and implementation. The index measures 40 components of ‘risk maturity’ that are grouped into ten overarching characteristics or statements of best practices. The Index is a confidential, web-based survey containing approximately 125 multiple-choice questions focused on observable practices and structures related to corporate governance, management decision making and risk management. More information and to learn how to participate visit http://www.aon.com/riskmaturityindex/

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About Aon

Aon plc (NYSE:AON) is the leading global provider of risk management, insurance and reinsurance brokerage, and human resources solutions and outsourcing services. Through its more than 66,000 colleagues worldwide, Aon unites to empower results for clients in over 120 countries via innovative and effective risk and people solutions and through industry-leading global resources and technical expertise. Aon has been named repeatedly as the world’s best broker, best insurance intermediary, best reinsurance intermediary, best captives manager, and best employee benefits consulting firm by multiple industry sources. Visit aon.com for more information on Aon and aon.com/manchesterunited to learn about Aon’s global partnership with Manchester United


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Meg Connolly

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