An enterprise risk management (ERM) maturity index for European Airports

Abstract

An ERM maturity assessment would support the development of an ERM process which will help Airports improve their capabilities to anticipate, manage and possibly turn risks into opportunities. The purpose of this study is to investigate and identify the best practices that represent ERM maturity in the business context of a European airport and to develop an ERM Maturity Index as a resource to assess and evaluate their ERM implementation. Structured interviews with ten airport risk management practitioners and consultants were conducted. Data generated from these interviews attested to twenty-two applicable ERM best practices, which were divided into eight categories. Following the development of the proposed maturity index, a case study was created and conducted in order to illustrate the use and interpretation of the resulting information. Results show senior management commitment, an optimum communication process, and well defined ERM roles and responsibilities. These are the three most crucial factors for airports to achieve a high degree of ERM maturity. Moreover, the study’s hypothesis that the best practices representing ERM maturity at organizations operating in the financial and insurance industries are equally applicable for European airports, was contradicted following the exclusion of two non significantly applicable best practices.