Enterprise Risk Management (ERM)
Organizations face an increasing number of evolving and interconnected risks that can impact balance sheets and earnings. With global economic uncertainty and the threat of black swan events, understanding your risks and developing formal risk management programs is crucial to protect and grow your business.
What is Enterprise Risk Management?
Enterprise Risk Management (ERM) is a structured approach that helps organizations identify, assess, and manage risks comprehensively. It provides a framework to enhance organizational resilience by improving decision-making, strengthening governance, and fostering a risk-aware culture.
What are the Features of Enterprise Risk Management?
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Risk Identification
Recognizing potential risks that could impact the organization.
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Risk Assessment
Evaluating the likelihood and potential impact of identified risks.
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Risk Management
Developing strategies to manage, mitigate and finance risks.
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Risk Monitoring and Reporting
Establishing a system to continuously monitor risks and report on their status, ensuring effective management.
By implementing a mature ERM program, organizations can better understand and manage their risk profiles, leading to more predictable operations and improved business performance.
What Questions Should I Be Asking About Enterprise Risk Management at My Organization?
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Are we taking the right risks?
- How are the risks we take related to our strategies and objectives?
- Do we know the significant risks we are taking?
- How are the risks we take related to the activities that create value?
- Do we make conscious choices about those risks that affect our business?
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Are we taking the right amount of risk?
- Are we getting a return that is consistent with our overall level of risk?
- Does our organizational culture promote or discourage the right level of risk-taking activities?
- Do we have a well-defined risk appetite (how much risk should we take) and has our risk appetite been quantified in aggregate and per occurrence?
- Is our actual risk level consistent with our risk appetite?
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Are we adequately managing our risks?
- Is risk management consistent across the entire enterprise? Does everyone have the same definition of risk?
- Do we have gaps and/or overlaps in our risk coverage?
- Is our risk management process aligned with our strategic decision-making and existing performance measures?
How Aon Can Help
Specialized Team
Our experience across strategic risk management, actuarial studies, and risk transfer enables us to develop a comprehensive ERM approach that helps clients understand their risks and empowers them to make better decisions.
Global Footprint
The risk landscape is highly interconnected, and multinational organizations need to understand their risks holistically. We leverage our global understanding of risk alongside our significant experience of developing ERM programs for global organizations to help clients navigate the constantly shifting landscape.
Unique Insights and Benchmarking
We develop insights to help organizations better understand their risks and the way they are managed. For example, our Risk Maturity Index is designed to assess organizations’ risk maturity and benchmark it against industry peers. Our Global Risk Management Survey findings provide analysis on the biggest risks on business leaders’ minds today and tips on how to manage and mitigate them.
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