Relationship found between risk management maturity and financial performance: Aon

A positive relationship exists between the maturity of an organization’s risk management framework and its financial performance, according to early findings from the Aon Risk Maturity Index.
Aon launched the index in partnership with the Wharton School of the University of Pennsylvania. It’s a proprietary online tool created to empower risk and finance leaders to assess the development of their organization’s risk management structure and implementation, an Aon release says.
Index questions focus on corporate governance, management decision processes and risk management processes.
By analysing the responses, researchers were able to draw a “statistically significant” relationship between risk maturity ratings and financial performance.
While the factors associated with these performance differences are likely to vary by infustry, analysis of information gathered by the index to date points to common threads among organizations that received an above-average risk maturity rating (i.e. 3.5 to 5 on the 1 to 5 rating scale).
“We are seeing firms that rate above average in risk maturity differentiate themselves in three areas: risk complexity awareness, formal agreement on risk management strategy/expectations and the degree to which organizational architecture is aligned to support achievement of risk management objectives,” said Michael Joiner, associate director of enterprise risk management for Aon Global Risk Consulting.