"Just as an organization must consider cultural differences in its decisions around new market or product entry, it must also consider cultural differences when setting its risk management framework strategy," said Michael Joiner, associate director of enterprise risk management for Aon Global Risk Consulting.
Aon Risk Maturity Index questions focus on corporate governance, management decision processes and risk management processes. Specific to this finding, participants were asked, "For each region in which your organization operates, please indicate the key challenges to instituting consistent risk management approaches" and were given the following multiple choice set of factors to consider: legal/regulatory, logistics/geographic, economic/financial, cultural and human capital/talent.
"As many businesses sharpen their focus on remaining competitive and sustainable in a world of uncertainty, this finding reminds us of the importance of starting with a solid understanding of both the environment in which an organization operates and the complexity of risks it faces," said Theresa Bourdon, group managing director, Aon Global Risk Consulting – Americas. "The Aon Risk Maturity Index is generating data that can be used to drive insights on business practices globally. As we expected, we are beginning to see interesting trends in the overall risk maturity of organizations based in different parts of the world.
"For example, in more mature markets where risk management has historically been a key component of an organization's operations, cultural challenges are less of an issue. In these cases, organizations are able to focus on the challenges driven by legal/regulatory, economic, human capital and logistics issues."
Looking at the remaining regions, human capital/talent factors were the most frequently identified challenge for organizations with operations in North America. Logistics/geographic factors topped the list for organizations with operations in Australia/New Zealand and Western Europe. Analysis also suggests the key challenges identified are consistent across major industries.
The Aon Risk Maturity Index was launched in 2011 and has captured responses from senior risk and finance leaders from more than 330 organizations around the world to date. As the database continues to grow, Aon and research partner The Wharton School of the University of Pennsylvania will identify the specific sets of activities overall and by industry associated with superior financial performance. The index is free and accessible by all interested organizations by emailing a request to risk.maturity.index@aon.com. In addition to the immediate feedback provided upon completion of the questions, participants receive a complimentary detailed results report approximately 10 to 15 business days thereafter. All responses and risk maturity ratings are held confidential; any reports from Aon and Wharton cite data in the aggregate. Additional information on the Aon Risk Maturity Index can be found at http://www.aon.com/riskmaturityindex.