The Aon Risk Maturity Index is an innovative tool that is designed to capture and assess an organization’s risk management practices and provide participants with immediate feedback in the form of a Risk Maturity Rating, along with comments for improvement.
The Aon Risk Maturity Index includes a variety of questions concerning risk management practices, corporate governance and management decision processes. The questions included are based upon the nine characteristics of advanced risk maturity:
Board-level commitment
Board-level understanding of and commitment to risk management as a critical factor for decision making
and for driving value
Executive leadership
A senior-level executive who drives and facilitates key risk management processes and development
Transparent risk communication
Consistent and routine risk reporting throughout the organization
A culture of risk ownership
Risk culture that encourages full engagement and accountability at all levels of the organization
Data and analytics
Identification of existing and emerging risks using internal and external data and information
Stakeholder participation
Participation of key stakeholders in risk management strategy development and policy setting
Risk-based decision making
Formal collection and incorporation of operational and financial risk information into decision making and governance processes
Risk quantification
Use of sophisticated quantification methods to understand risk and demonstrate added value through risk management
Optimized risk profile
A move from focusing on risk avoidance and mitigation to leveraging risk and risk management options that extract value
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Situation
A newly appointed Chief Risk Officer (CRO) of an American manufacturing company sought to evaluate existing risk management capabilities and develop a strategic path forward.
Process
Sixteen participants, representing various functions within the company, completed the Risk Maturity Index individually. Results were compiled into a preliminary report, highlighting industry and global benchmarks, differing risk perspectives, as well as risk management strengths and weaknesses across the key foundational elements of governance/infrastructure, process, integration into strategic planning and decision making, and culture/communication. A subset of the participant pool was selected for a workshop, which featured the presentation of results, discussion of key risk issues, and recommendations for improvement. A final report was developed to reflect results from the workshop, citing the company’s baseline level of risk maturity and suggested next steps to advance capabilities.
Outcome
A risk improvement strategy that leverages organizational strengths, closes gaps and supports a sustainable Enterprise Risk Management (ERM) program. Presentation of project results to the executive leadership team with support to continue improvement plans. Results were also utilized for the quarterly Board of Directors meeting.
For more information, please contact your Aon representative or send a request to [email protected].