Governance Impact

Governance Impact

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Impact_Report_2023_Governance
Impact Report 2023

Governance Impact

Better decisions for a better world. Explore Aon's environmental, social, and governance impact.

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Introduction

As a firm in the business of better decisions, our Board of Directors’ oversight, internal structures and governance approach model best practices to support effective decision making. The ability to understand and deliver innovative, trusted solutions to clients to help them address the risks and opportunities posed by ESG-related issues has never been more important.

At Aon, we look at risk across all dimensions of our business and continue to further embed ESG and emerging risks into our enterprise risk management (ERM) strategy. At the same time, our continued investments and focus on Aon Business Services is designed to help us improve the quality of our content and capabilities, while simultaneously reducing risk by standardizing our operations and client delivery model to provide an increasingly consistent level of service to our clients.

Our work in this space – and the feedback we receive from clients, colleagues, investors and other stakeholders – helps inform our priorities and actions. We continue to enhance our global and regional climate disclosures, including through our Task Force on Climate-related Financial Disclosures (TCFD) Disclosure, and our ESG supplemental information has improved our disclosure and communication of our policies and practices.

“Our approach is focused on linking governance, culture and purpose as a best practice,” said Darren Zeidel, executive vice president, general counsel and company secretary for Aon. “We combine strong organizational oversight with the flexibility, adaptability and resilience to solve problems when they arise and the communication and behavior modeling that builds an ethical, values-driven culture. This is the foundation of better decision making.”

Goalsetting is backed by relevant metrics and subject to Board and management oversight. We are focused on coordinating across our capabilities, shared services and geographies to clearly define our processes and policies, operate more effectively and advance how we serve our clients and support our firm.

Jump to Section

  1. Board of Directors

  2. Enterprise Risk Management Strategy

  3. Cyber Security, Privacy and Data Compliance

  4. Governance Solutions for Clients

Board of Directors

Aon’s Board of Directors provides oversight of the firm’s overall performance, strategic direction and executive management team performance, including management of its top risks and mitigation plans. Aon’s Board is focused on effective corporate governance to deliver long-term value for all stakeholders, including execution of the company’s ERM and risk mitigation strategies.

Our Board engages in a thoughtful director refreshment process, designed to ensure we’re maintaining continuity, as well as increasing our expertise and insight into emerging risks. For example, in the past four years, we’ve added four new Board members, who bring new and diverse perspectives and strong business acumen and experience.

Of the 13 directors on our Board, 12 directors are independent, including the Board Chair. Three of our directors are ethnically or racially diverse, and five are women. Further information regarding our Board of Directors can be found on our investor relations site.

The Board has five standing committees: the Executive Committee, the Audit Committee, the Finance Committee, the Governance/Nominating Committee and the Organization and Compensation Committee. The Board has also established a standing Inclusion and Wellbeing Sub-Committee within its Governance/Nominating Committee.

The Board of Directors

Enterprise Risk Management Strategy

Our ESG efforts are embedded across our business and risk management activities.

Aon’s ESG Steering Committee, which is made up of senior firm leaders, has overseen a comprehensive ESG risk assessment and senior management regularly reports on our findings to the firm’s Board of Directors. Key ESG risks identified in the assessment are incorporated into Aon’s enterprise risk management framework and are reviewed regularly. The Board reviews Aon’s ESG and climate strategy and, more generally, the Board (or its committees) oversees the company’s ESG risks and opportunities – people management, governance, climate, executive compensation, inclusion and wellbeing, and data security and privacy, to name just a few examples. In 2023, we continued to strengthen our work in inclusion and wellbeing. The full Board (or its committees) reviewed people-related risks and opportunities, including colleague satisfaction and engagement survey results, pay equity, colleague wellbeing, succession planning, employment law and ethics matters. The full Board reviewed progress against Aon’s inclusion and wellbeing strategy and initiatives

Cyber security, data security, and data privacy matters are an important focus of our Board’s oversight of risk. Aon’s management regularly presents (no less than twice annually) to the Audit Committee of the Board regarding cyber security, data security and data privacy matters. The Company’s management, including the Chief Security Officer, regularly presents (no less than twice annually) to the Audit Committee of the Board on cyber security, data security and data privacy matters.

Cyber Security, Privacy and Data Compliance

Cyber risk has the potential to disrupt and destabilize businesses and continues to escalate as a board-level concern for businesses around the world. Governance and risk management in this area has never been more important. “Organizations today are faced with increasing cyber security threats at a time when data and digital assets have never been more valuable,” said Catherine Mulligan, global co-head of cyber reinsurance solutions for Aon. “Whether protecting the privacy of employee data or the value of intellectual and digital property, they need a partner who can help assess and mitigate risk for the Board, for investors and for clients.”

In our 2023 Global Risk Management Survey, respondents cited the risk of cyber attacks and data breaches as the top threat facing companies today. Aon also released our Cyber Resilience Report in 2023 to help leaders benchmark their organizations' risk maturity against peer companies and make better decisions around managing cyber risk across key risk themes.

In response to these growing risks, we are focused on data-driven solutions that help clients identify, measure and manage the risk for greater cyber resilience and growth, building on our expertise, insights, and proprietary tools and methodologies. One such tool is CyQu, our cyber risk assessment diagnostic, which helps companies understand where they are in their cyber maturity and identify their biggest vulnerabilities, helping prioritize their actions and protect their business.

We work with companies to establish cyber security processes and governance frameworks that address cyber as the enterprise-level risk it has become so they can make better cyber decisions and react to challenges in real time.

Aon Impact - Tailoring Our Cyber Solutions

As we brought our Commercial Risk and Reinsurance solutions together as Risk Capital, our clients have benefited from an improved connectivity that has driven innovation and results – all delivered through our Aon Client Leadership Model and powered by Aon Business Services.

These new levels of connectivity can be seen in the range of cyber risk solutions we offered to clients in 2023:

  • Our Risk Capital team helped complete a first-of-its-kind cyber catastrophe bond to provide protection from systemic cyber events. The bond was the result of a successful capacity strategy, an innovative and cutting-edge cyber insurance-linked security (ILS) and data and analytics from Aon Business Services. It highlights how Aon is matching risk and capital in innovative ways and lays the foundation for what we can do for our clients – not just in cyber but in other areas of demand across Commercial Risk.
  • This connectivity can also be delivered at scale through solutions that are available to clients of every size, including the middle market. One example is our CyQu tool, which helps our clients benchmark their cyber risk across 14 dimensions as well as identify the components that are most relevant to their insurance coverage. Powered by Aon Business Services, CyQu helps chief information security officers and risk managers better understand what’s driving their risk and the steps they need to take to address and mitigate. This is especially powerful as we see underwriters looking for increasingly more information and data. It also enables efficient analytics and benchmarking for our clients, which helps them translate their security positioning into their insurability.

These examples highlight how our teams coming together across Risk Capital, in an Aon United way to not only deliver results for clients today but also to pave the way for stability and capital growth in the insurance market as a whole.

Artificial Intelligence

Aon has a culture of innovation, and we are relentlessly focused on delivering innovative solutions to meet client needs. In 2023, one of the most discussed issues in the business world was artificial intelligence (AI) and, in particular, generative AI, which has the ability to create material like images, music, video and text built from existing data sets.

While this technology is still in its infancy, generative AI has the potential to revolutionize the way we work alongside introducing new and quickly evolving risks.

At Aon, we are continually looking to enhance our services, including through the use of AI, and we are working across the firm to investigate these new capabilities and incorporate them into our Aon Business Services toolset. Aon’s roles and responsibilities when it comes to AI can be grouped into three categories:

  • As a Provider of AI Risk Frameworks and Solutions

    Powered by Aon Growth Ventures, we are in a unique position to work with insurer partners on AI risk transfer and to provide insights, advisory, consulting to our corporate clients

  • As a Producer of Risk, Health and Talent Analytics Offerings

    Through Aon Business Services, we power our revenue-generating and client-facing analytics products and advice.

  • As a Consumer of Partner AI Solutions

    Aon Business Services will leverage large language models (LLMs) to drive productivity, enterprise automation, redesign key business processes and enhance client and colleague experiences.

We’re also focused on ensuring that we have the right governance model in place to help our colleagues protect Aon and client data – which is critical if we’re going to engage with these new tools. The steps we’ve taken to bring together operations in our Aon Business Service platform strongly position us here, as we can assess and execute the best opportunities from across the firm, quickly and efficiently.

Aon has established an AI Steering Committee made up of senior Aon leaders in Technology, Enterprise Architecture, Security, the Aon Centre for Innovation and Analytics, Law and Compliance and Privacy.

This team is tasked with evaluating AI technologies, testing them for confidentiality, privacy and intellectual property assurances, and exploring potential internal and external use cases. Because of the evolving risks and rapidly emerging capabilities surrounding AI, the Steering Committee is involved in the oversight of all generative technologies and selected pilots are underway to help us evaluate capabilities, costs and risks so that we can develop responsible use and protocols and deliver innovative solutions for our clients and colleagues.

Impact Story - Hackathon Identifies New Opportunities to Use AI

Aon and CoverWallet hosted the fifth annual Hackathon in 2023 with the aim of helping colleagues harness the power of AI to revolutionize the insurance industry. The goal of the session was to leverage AI to drive efficiencies and enhance services across Aon, including the digital customer experience during purchase and renewal, underwriting and risk assessment.

Teams from Aon’s offices in the U.S., Spain, Singapore, Poland and Colombia worked together to present their ideas for innovative solutions to a roundtable of judges which included Aon’s Ibrahim Gokcen, chief of data and analytics, Jillian Slyfield, chief innovation officer, and Roberto Pinto, president of Digital Client Solutions.

The top prize went to an idea for a large language model that would help automate administrative tasks such as offline quoting, generation of certificates and handling endorsements.

Governance Solutions for Clients

Strong governance oversight enables better decisions, creating the conditions for organizations to quickly adapt to the changing landscape, shift priorities and manage emerging risks. Aon provides executive leadership teams and their boards of directors with real-time insights and solutions to help navigate an evolving ESG landscape, prioritize relevant risks and focus on making better decisions by strengthening governance and oversight over key risk factors.

Our Aon United strategy is designed to address our clients’ needs by bringing the best of our firm and our expertise across ESG to their organizations and priorities. Working across our Risk Capital and Human Capital capabilities, we provide a tailored approach that helps clients navigate complex conversations and provide the vital information to relevant stakeholders such as regulators, investors, employees and customers to achieve the best possible outcomes.

“The business environment is constantly changing, and with that comes new risks – and opportunities – that require companies and their boards to adapt and reprioritize to meet ESG goals and expectations from various stakeholders,” says Laura Wanlass, global head of corporate governance and ESG advisory for Aon. “We bring together a team of experts to address those risks in an integrated, cohesive way, relying on data and analytics and decades of experience so our clients can make better business decisions that serve them not only today but over the long term.”

Our products and services reflect our clients’ evolving needs, including our portfolio of strategically developed solutions:

  • Executive and Board Advisory Services:

    Our colleagues serve as formal ongoing advisors to the full board and select key committees of the board on evolving corporate governance, ESG and related sub-topics (for example, Audit, Compensation/Human Capital or Nominating and Governance). This includes presenting trends at quarterly meetings and making recommendations on key decisions by using benchmark data and our knowledge of the regulatory landscape and other external stakeholder expectations. We also offer director onboarding and ongoing education, as well as real-time tabletop exercises on cyber threats and other business continuity topics.

  • ESG Maturity Diagnostic:

    Aon’s ESG Maturity Diagnostic tool addresses potential exposure to ESG oversight, practices, policies and reporting. It can help clients with the framework of their ESG maturity and how best to convey the past, present and future of their ESG journey to directors and officers (D&O) underwriters. The tool helps D&O underwriters better understand the company’s ESG risks and how the company is differentiated in the market.

Our incident response solutions and services are also recognized for the strength of our vision, expertise, integrated approach, risk quantification and insurance claims preparation and advocacy.

When they strike, global protection incidents can have a catastrophic impact on the life and safety of employees, customers or stakeholders, as well as a significant enterprise-wide impact on the ability to deliver solutions or services.

Aon’s Global Protection Incident Response (GPIR) Framework leverages our ERM and response capabilities across multiple regions or functional areas. The GPIR Framework is centered around and aligned to Aon’s purpose and values, ensuring actions and decisions made during GPIR mobilizations preserve those values. These values are:

  • Preserve the lives and safety of all people
  • Ensure compliance with local laws and regulations
  • Fulfill our commitments to customers and stakeholders
  • Mitigate operational disruption to our business
  • Act as responsible stewards of our business and strive to manage financial impacts of events
  • Protect the brand and reputation of Aon

Related Information

Impact Report 2023