Does the firm want to grow in Russia, where it turns out the local governments decide to stop payments?

Does it want to grow in Argentina, where the IMF has cancelled their loans?

Does it want to grow in Lebanon, where they've decided to stop payment, as well?

The company has a decision to make–does it want to grow or not grow? Risk management is at the crux of that argument.

I have focused on two key constituents over the course of my 18 months with Aon–my Aon colleagues and about 1,800 clients around the world. I've drawn six observations directly from conversations with CEOs, CFOs, risk managers and treasurers from Asia, Europe and the Americas. They are:

I've talked to many CEOs whose companies have gone through tremendous turmoil because they misunderstood risk. What is it? How big is it? What's the priority?

Consider the fact that $300 billion was spent last year in the United States alone on risk advice and risk mitigation.

A study by McKinsey & Company revealed that when something occurs, the impact within the first six months is almost 12-times the actual event. So, if a $100 million event happens, the impact is over $1 billion in market cap within the first six months. That's a huge penalty when you think about not appropriately managing risk.

Meanwhile, Accenture recently asked 450 CEOs, “What's on your mind? What are the issues you face every day?” The answers encompassed such things as, “How do we grow the business?” Or, “What do I think of [my] employee capability?” Or, “How should I expand in another country?”

Among the issues that CEOs think about every day, number one on that list was risk.

Think about the biggest events during the last decade. In 1989, the San Francisco Earthquake and Hurricane Hugo were a combined $6 billion event.

The two biggest single events in the history of the world up until last summer were the tragedy of Sept. 11, 2001, and Hurricane Andrew. They were $20 billion events. Hurricanes Katrina, Wilma and Rita last year were a combined $60 billion loss–three times the difference. The magnitude is absolutely staggering.

Between 1970 and 1990, the average annual catastrophe loss was around $3 billion. From 1990 to 2004, it was in excess of $16 billion a year. So whether it's terrorism or pandemic or global warming, the magnitude of risk is going up.

There were $20 billion in insured losses on 9/11, but the U.S. government last year spent over $500 billion fighting terrorism.

Think about pandemic. We've talked about this with thousands of our clients over the course of the year. The projected potential global impact of pandemic over a six-month period could be as much as $200 billion.

What if you were fully prepared for pandemic but nobody else was? Your firm would still be affected. What if you've got a supplier in China? You might not be touched, but what if they are? Your firm could then be in trouble. Remember Y2K? What if you spend a few million dollars and nothing happens? This is an incredibly complex game.

Hurricane Katrina is still in the headlines more than a year after the event. Our top 25 or 30 clients had almost $4 billion worth of claims to resolve, and the complexity was absolutely stunning.

Say you had a $500 million building severely damaged by wind–a $50 million claim. Say it then sustained further damage by the storm surge–a $50 million claim.

Say it then sustained serious flood in the middle of a sweltering summer, and the structure sustained additional damage from mold. That's a $500 million loss. But is it covered? The difference between yes and no is literally the survival of the company.

The CEOs didn't say this, but the risk managers did. It used to be, you could do this in the corner.

Now, all of a sudden, the CEO wants to know; the board wants to know; the CFO wants to know; the treasurer wants to know. It's a big deal and the stakes are huge.

Progressive Insurance is an excellent example. Progressive looked at a body of risk called auto insurance and basically said, “Credit scores are the biggest predictor of whether we're going to have an automobile accident.” They looked at the same risk that Allstate and State Farm saw, and saw opportunity.

Between 1986 and 2006, Progressive's share price has grown by roughly 3,000 percent. They've done an unbelievable job of tearing through the auto world and gaining ground on two icons–State Farm and Allstate–all because they took a different view of risk.

I believe that behind every great idea is a view on how to think about risk in ways that other people haven't.

Your view on risk has to be managed, and it has to be embraced. If you wait to react, it's too late.

How do you think about risk in your firm, in your company? Is it a big deal, or not a big deal? Is there more upside or downside? How do you manage it? What's the game plan? If you don't have a view, you're losing tremendous opportunity.

In the immortal words of Shakespeare: “Defer no time. Delays have dangerous ends.”