An Overview of ISO 31000

ISO 31000 is an international standard that provides businesses with principles & guidelines for risk management from the ISO. Whether you work in a private, public, or community enterprise, you can benefit from the ISO 31000 Certification because it applies to most business activities comprising management operations, communication processes & planning. By implementing the guidelines and principles of ISO 31000 in your Organisation, you will be able to improve operational efficiency, stakeholder confidence & governance while minimising losses. This standard helps you to boost health & safety performance, set up a robust foundation for decision making & encourage proactive management in all areas.

This standard doesn’t provide detained requirements or instructions on how can you manage specific risks, nor any advice regarding specific application domain; it remains at an ordinary level. Relative to earlier standards on risk management, the 31000 standard innovates in some areas:

• It introduces the notion of risk appetite or the risk level in which Organisation accepts to take on in return for expected value.
• It provides a new meaning of risk as the effect of uncertainty on the possibility of achieving the objectives of an organisation, emphasising the importance of defining objectives before attempting to control risks and emphasising the role of uncertainty.
• It defines the framework of risk management with different organisational procedures, roles & responsibilities in the management of risks.
• It outlines a management philosophy where risk management is seen as an important part of strategic decision-making.

ISO 31000 Framework

The Framework is Made Up of 6 Distinct Areas:

• Design: Organisations will need to design a risk management strategy that works for the Organisation based on its requirements.
• Leadership: Leaders within the company or Organisation will need to take the initiative to ensure that ISO 31000 is adopted & applied in a way that aligns with the Organisation’s culture & business objectives.
• Improvement: Organisations should continuously look for ways to improve their 31000 implementations.
• Evaluation: This assesses the design to know what is working and what may need to be refined.
• Implementation: This implementation process integrates the Organisation’s risk management design into business processes. Implementation is generally a formal process with stated deadlines, objectives & reporting requirements.
• Integration: While it is vital to integrate risk mitigation into as many organisational processes. It is vital to not cause operational bottlenecks or stand in the way of core business processes being performed.

Key Clauses of ISO 31000

Risk Management

Principles: In order to have effective risk management, an organisation must comply with the following principles

• Risk management is an essential part of all organisational processes.
• Risk management takes human & cultural factors into account.
• Risk management facilities continual improvement of the Organisation.
• Risk management protects & creates value.
• It is tailored.
• It is inclusive & transparent.
• It’s an essential part of all organisational processes.
• It clearly addresses uncertainty.
• It provides continual improvement of the Organisation.
• It is iterative, vibrant and responsive to change.

Risk Management Framework

ISO 31000 states that the success of risk management will depend on the management framework’s management providing the foundations & arrangements that will embed it throughout the Organisation at all levels. The framework:

• Helps in managing risks efficiently via the application of the risk management process.
• Ensures that information regarding risk derived from the risk management process is effectively reported.
• Confirms that this information is used as a basis for decision making & accountability at all relevant organisational levels.

Risk Management Process

The process should be:

• Embedded in the culture & practices.
• An integral part of management.
• Tailored to the Organisation’s business processes.

Risk Management Process Includes the Following Activities:

• Consultation & Communication: Communication & consultation with internal & external stakeholders should take place during all stages of the process.
• Establishing the Context: By establishing the same, the Organisation clears its objectives, defines the internal limits to be taken into account when managing risk & sets the scope & risk criteria for the remaining process.