Senior risk and finance leaders most often say cultural factors are the primary challenge to instituting a consistent global risk management approach in key emerging markets, according to the Aon Risk Maturity Index by Aon Risk Solutions, the global risk management sector of Aon.
These emerging markets include Asia-Pacific excluding Australia and New Zealand, Central America, Eastern Europe, the Middle East, Africa and South America.
"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," says Michael Joiner, associate director of enterprise risk management for Aon Global Risk Consulting.
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The survey questions center on corporate governance, management decision processes and risk management processes. Among the main challenges related to instituting consistent risk management approaches, respondents considered legal and regulatory, logistics and geographic, economic and financial, cultural, and human capital and talent challenges.
"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," says Theresa Bourdon, group managing director of 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, 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."
Of the remaining regions, human capital and talent factors are most often said to be challenging for organizations with operations in North America while logistics and geographic factors are the most difficult for organizations with operations in Australia, New Zealand and Western Europe.
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