Participants in the “Aon Risk Maturity Index” most frequently cited “cultural factors” as a challenge to instituting a consistent, global risk management approach in emerging markets. Results were announced at the Risk and Insurance Management Society’s annual conference and exhibition on April 16, 2012.
“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.
The index includes a variety of questions concerning risk management practices, corporate governance and management decision processes. Other responses to the multiple-choice question, “For each region in which your organization operates, please indicate the key challenges to instituting consistent risk management approaches,” included legal/regulatory, logistics/geographic, economic/financial, cultural and human capital/talent. The questions and content are targeted at risk and finance leaders, although senior legal or business leaders may also be able to respond.
“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, Bourdon says, 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, she explains.
In other 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.
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