ISO
31000 is intended to be a family of standards relating to risk management
codified by the International Organization for Standardization. The purpose of
ISO 31000:2018 is to provide principles and generic guidelines on risk
management. ISO 31000 seeks to provide a universally recognized paradigm for
risk management practitioners and companies employing risk management processes
to harmonize the myriad of existing standards, methodologies and paradigms
across industries, subject matters and regions. These standards are designed
for use in public, private or community enterprise, association, group or
individual and are not specific to any industry or sector. ISO 31000 helps
organizations in identification of opportunities and threats and effectively
allocate and use resources for risk treatment. It provides guidance for
internal or external audit programs and helps them compare their risk management
practices with an internationally recognized benchmark.
1.
ISO 31000: 2018 helps organizations identify both positive opportunities and
negative consequences associated with risks. This allows you to provide
information and more effective decision-making, especially in the allocation of
limited resources of the organization.
2.
Modern and effective risk management is integrated into how an organization
operates and the decisions it makes, and integration is made crystal clear in
ISO 31000: 2018. The words “integrate†and “integration†is regularly woven in
to the standard. This is one of the most important points to take note of: that
we must make sure the way risk is taken and managed is integrated into what
people do.
3.
ISO 31000: 2018 defines leadership as being critical to having effective
integrated risk management in place. We all know this is the case, and we need
to ensure good leadership exists in our organizations, at all levels.
4.
ISO 31000: 2018 makes it clear that the risk framework and process are to be customized
and proportionate to your organization. This is key, in my view. Make your
framework fit for purpose by integrating it into how your organization works.
ISO 31000: 2018 doesn’t provide details about different organizational
processes, because it doesn’t have to. You know what yours are – so stitch
“risk thinking†into your core processes in a simple and effective manner.
5.
ISO 31000: 2018 is not prescriptive. There is no “stated expectation†to use
particular Risk techniques – it leaves you to decide what works best and
delivers the most value in your organization. Remember that less is often more.
By working with everyone in your organization and using simple, straightforward
practices, you will discover and learn what works best to achieve results and
objectives.
6.
The Risk process diagram in ISO 31000: 2018 (risk assessment, risk treatment etc.)
is basically the same as it was in the old version, which is fine. It’s doesn’t
need to be repeated in a business risk framework. The iterative process to look
at and respond to risks occurs naturally when you use good risk management
practices with people in their working environment.
Conclusion
ISO
31000:2018 can help create and protect value for any organization by providing
a flexible framework supported by principles that focus on strategic decision
making with risks in mind, aligning risk management activities with meeting
objectives, and stressing how top management support is crucial for effective
implementation. Focusing on taking risk management from a stand-alone function
to a methodology that supports intelligent risk taking to meet objectives will
be a common theme moving forward. If individuals are given the tools to promote
critical thinking on how uncertainty can impact meeting objectives than the
organization overall should see an increase in value from an integrated risk
management framework. ISO 31000 helps to determine different ways and measures
to control those risks and providing assurance to the organization that it can
create and implement an effective management plan to minimize or prevent loses
occurrence. A good risk management plan should state clearly strategies
techniques to be used to recognize and confront threats and vulnerabilities
facing the company and provide possible solution to the problems.
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