Risk management adds to bottom line
risk management framework and its financial performance, according to the Aon Risk Maturity Index, reports Canadian Underwriter.
Aon unveiled the index in partnership with the Wharton School of the University of Pennsylvania. It is a proprietary online tool created to empower risk and finance leaders to assess the development of their organisation's risk management structure and implementation, an Aon release says.
Business Insurance says Christopher Ittner, Ernst & Young professor of accounting at Wharton, used preliminary data for publicly traded companies, ranging from medium businesses to Fortune 100 companies, and found a “statistically significant relationship” between risk maturity ratings and financial performance.
The index is based on assessing areas such as corporate governance, management decision processes and risk management processes.
“By [releasing] this index and performing extensive analysis, we have answered the question business leaders have been asking for years: Does better risk management really make a difference to our bottom line?” explains Theresa Bourdon, group managing director at Aon Global Risk Consulting - Americas, in a Sacramento Bee report.
“The writing was on the wall, and now we have the facts to support the importance of a strategic risk management framework,” notes Bourdon.
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