ISO 31000 risk management is an international standard that was published in 2009. It provides the guidelines and principles to facilitate effective risk management.
ISO 31000 risk management is an international standard that was published in 2009. It provides the guidelines and principles to facilitate effective risk management. It presents a generic approach towards risk management which is applicable to various forms of risk and used by any organization. The ISO 31000 risk management offers a uniform vocabulary as well as concepts for risk management.
It offers principles and guidelines that can assist in executing a critical review of the risk management process of an organization. It does not include detailed requirements or instructions on managing particular risks. Moreover, it also does not provide any advice related to any application domain. Basically, the principles and guidelines or ISO 31000 risk management remain generic.
Risk Management Process Outlined By ISO 31000 Risk Management
Following are the risk management process highlighted in the ISO 31000 risk management standard:
● Identification Of Risk: Determining the risk factors that can impact the organization from accomplishing its objectives.
● Analysis Of Risk: Understanding the sources as well as causes of the risks that have been identified. Studying the likelihood and consequences based on the existing controls. It is done to determine the residual risk level.
● Evaluation Of Risk: Evaluating the results of risk analysis against the risk criteria. This is done to figure out whether or not the residual risk is tolerable.
● Treatment Of Risk: Changing the likelihood and magnitude of consequences include negative and positive to increase the overall benefit.
● Creating The Context: Defining the scope of the risk management process, organization’s objectives, and risk evaluation criteria. The context includes internal elements such as culture, governance, capabilities, standards, and rules, workers' expectations, etc. Additionally, it also comprises external elements such as regulatory ecosystem, stakeholder expectations, market conditions, etc.
● Monitoring And Reviewing: Comparing the performance of the risk management process against predetermined indicators. The performance is reviewed on a regular basis. The process involves assessing for deviations from the main risk management plan, framework, and policy. Reviewing the process ensures whether or not all the aspects are being followed in the proper manner.
● Communication And Consultation: It helps in understanding the interest and concerns of stakeholders, assessing the process is focusing on the right elements, and explaining the risk treatment decisions.
In the highly volatile business world, the ISO 31000 risk management is customized for every organization which is looking for guidance on risk management. It offers principles, a framework, and a process to build a risk management process.