Companies with higher risk-management maturity experience higherrelative stock-price returns, lower volatility in stock price,higher relative return on equity and greater resilience in theimmediate aftermath of significant financial-market risk events, anAon study shows.

While risk managers may see this as stating the obvious, Aon andthe Wharton School of the University of Pennsylvania now provideactual data to support these assertions.

The study analyzed a sample of 361 publicly traded companies andused Bloomberg market data from March 2011 to March 2013 to“evidence a statistical link between higher levels of risk maturityand higher relative stock-price returns along with lower levels ofrelative stock-price volatility.”

Aon categorized the companies into its Risk Maturity Index,where they were rated on a scale of 1-5. A rating of 1 is“initial/lacking,” or, “Component and associated activities arevery limited in scope and may be implemented on an ad-hoc basis toaddress specific risks.” A rating of 5 is “advanced,” or,“Well-developed ability to identify, measure, manage and monitorrisk across the organization; process is dynamic and able to adaptto changing risk and varying business cycles; explicitconsideration of risk and risk management in managementdecisions.”

Aon notes that 0.7% of the companies had a rating of 5 and 3.3%had a rating of 1. The global average was 3, with the percentagebreakdown representing a bell curve from 1-5.

Looking at yearly stock-price returns, Aon says that, during theperiod from March 2012 to March 2013, organizations with thehighest Risk Maturity Rating of 5 as a group showed stock-priceperformance of +18%, while organizations with the lowest rating of1 showed stock-price performance of -10%.

Regarding stock-price volatility during that period,organizations with a rating of 5 experienced volatility that was38% lower than organizations with a rating of 1.

And with respect to return-on-equity over that period,organizations rated 5 showed ROE performance of +37% whileorganizations with a rating of 1 showed ROE performance of-11%.

Aon also examined how the organizations' stocks would respond toa list of historical shocks if the same factors occurred today.

For the Lehman default, Aon says organizations rated 5 wouldtoday experience an immediate impact on stock-price performance of-21% based on its model, while companies rated 1 would seestock-price performance of -30%.

In the aftermath of the Greek fiscal crisis, if it were to occurtoday, companies rated 5 would see stock-price performance of -11%while companies rated 1 would see stock-price performance of-20%.

If the March 2011 Japan earthquake happened today, companiesrated 5 would see an immediate impact on stock-price performance of-0.3%, while companies rated 1 would show stock-price performanceof -3.4%

Aon says, “Aon's partnership with the Wharton School of theUniversity of Pennsylvania has produced pioneering research on thislink, confirming a correlation between more mature risk-managementpractices and stronger financial results.”