A survey conducted in July and August of 2009 by Aon has revealed that companies are moving beyond “basic” ERM implementations:
62% of the survey respondents in the Global Enterprise Risk Management Survey 2010 reported going beyond basic ERM, compared with only 38% in Aonâ€™s inaugural ERM survey in 2007.
I wonder what happened between now and 2007 that would’ve affected companies’ willingness to ramp up their risk management practices…
The survey asked respondents (of which there were 201) to rate the maturity of their ERM implementation, from “initial/lacking” through “basic”, “defined”, “operational” and “advanced”.
My take is that respondents are more likely to overestimate the maturity of their implementation and generally more likely to respond the more advanced they (feel they) are in the process. Still, the survey is a welcome indicator that ERM efforts are on the rise.
I also think the fact that ratings firms are taking ERM into account when they determine their grading is helping executives point to a tangible financial benefit and obtain buy-in from all stakeholders, which is critical. In my mind the primary indicator of maturity in a company’s risk management program is how comprehensive it is across all departments and divisions, as the “initial/lacking” stage is exhibited by a rigid, siloed approach.
The survey is available on Aon’s website (if you give them some personal information first).