When it comes to business, there is no opportunity that does not come with risk. In brief, risk is a patron of ambiguity that has its effect towards the achievement of business objectives. Therefore, one has to be clear about the risk’s nature and the level of ambiguity that it offers inorder to better manage them and achieve business targets through effective risk management strategies. Hence the goal here is, to create a process for managing the risks related to conducting business in an environment comprised of stakeholder networks while ensuring compliance with contracts, national and international legislation and industry regulations.
Risk Management according to ISO 31000 is a pre-mediated action that reduces risk to an acceptable minimum level by neutralizing the negative incidence.Risk management is a central part of the strategic management of any organization a process through which organisations methodically address the risks attached to their activities.A successful enterprise risk management (ERM) initiative can affect the likelihood and consequences of risks materializing, as well as deliver benefits related to better informed strategic decisions, successful delivery of change and increased operational efficiency.
ISO 31000:2018 Risk management Principles and guidelines, provides a set of principles, a framework and a process for managing risk. Using ISO31000:2009 can help organizations of all sizes increase the likelihood of achieving their objectives, improve the identification of opportunities and threats, and effectively allocate and use resources for risk treatment.
Implementing an effective risk management through ISO 31000 include using enterprise-wide risk management processes enabling organization to:
Risk management is an increasingly important business driver as stakeholders have become much more concerned about risk. ISO 31000 is the next-generation standard for risk management where it compliments all existing standards and recommends a new approach and concept for easier and more effective risk management. The main idea behind ISO 31000 is to link risk management to decision-making and performance, helping managers to make risk-based decisions under uncertainty to achieve objectives. It can be used by any organization regardless of its size, activity or sector. Using ISO 31000 can help organizations increase the likelihood of achieving objectives, improve the identification of opportunities and threats and effectively allocate and use resources for risk treatment.
ISO 31000 seeks to provide a universally recognized paradigm for practitioners and companies employing risk management processes to replace the myriad of existing standards, methodologies and paradigms that differed between industries, subject matters and regions.The core objective of ISO 31000 is not to support the process of risk management but, to provide with a framework for managing risks in a strategically effective manner. Based on the requirements of an organization over its risk management strategy, the framework of the RMS will comprise its planning, policy and procedures that is actually followed by them. The strategy should be such that the organization should achieve its business objective through the support of risk protocols which in detail describes the procedures to implement the strategy to manage risk effectively. The ISO 31000 standard specifies framework that consists of essential steps that needs to be followed towards the implementation and ongoing support of any risk management process. They are,
The design and implementation of risk management plans and frameworks will need to take into account the varying needs of a specific organization, its particular objectives, context, structure, operations, processes, functions, projects, products, services, or assets and specific practices employed. A successful enterprise risk management (ERM) initiative can affect the likelihood and consequences of risks materializing, as well as deliver benefits related to better informed strategic decisions, successful delivery of change and increased operational efficiency. Other benefits include reduced cost of capital, more accurate financial reporting, competitive advantage, improved perception of the organization, better marketplace presence and, in the case of public service organizations, enhanced political and community support.
Some of the Principles that requires to be highlighted when it comes to risk management are:
The ISO 31000:2018 standard is based on the same wider process likewise the AS/NZS 4360:2004 for managing risk after considering numerous options and variants,. The process undergoes a series of iteration at each phase and continuously applies to the elements of communication, consultation, monitoring and review.
In the first stage of the ISO 31000 risk management process, organizations should establish the context of the risk assessment as it relates to both internal and external factors. The most important deliverable from this stage is establishing the objectives and scope of the risk assessment. The organization should have a clear statement of purpose for the assessment and everyone involved should understand what business processes and technologies are included within the assessment's scope.
After setting the objectives and scope, the organization should spell out the factors affecting the assessment. This should include external factors such as the legal and regulatory environment, political considerations, economic circumstances and the views of external stakeholders. It should also include internal factors such as the organizational structure, corporate governance, business processes and technologies.
The risk assessment phase has three goals: risk identification, risk analysis and risk evaluation. During the risk identification step, the organization develops a comprehensive list of the risks that might prevent it from achieving its objectives, as well as the causes and possible outcomes of those risks materializing. This information is considered carefully during the risk analysis, where the organization conducts qualitative and/or quantitative assessments of those risks. The risk assessment stage culminates in the risk evaluation step, where the organization decides which risks are significant enough to require active management and prioritizes that list.
During the risk treatment stage, more commonly referred to as the risk management stage, the organization implements controls designed to reduce risk, assess the effectiveness of those controls and implement additional controls on an as-needed basis. The controls performed during the risk treatment stage may include measures designed to decrease the probability or impact of a risk, avoid a risk entirely by altering business processes, take justified risks, and
transfer the risk to third parties, such as insurance companies.In addition to the three core stages of the risk assessment process, ISO 31000 recognizes that there are two equally important complementary processes that should occur at every stage of the assessment: communication and consultation, and monitoring and review. Organizations conducting an assessment should keep stakeholders informed throughout the process and conduct monitoring to ensure the process is effective.
ISO 31000 regulates the requirements of risk management process and introduces the methodology of risk analysis. Operational risk management supports your organisation’s decision-making by identifying and responding to threats that may have an adverse effect on the organisation’s operations or goals. ISO 31000:2009 gives a set of general options to be considered when risk is treated. The order of the list reflects preference. They are:
ISO 31000:2018 can be used by any public, private or community enterprise, association, group or individual. Therefore, ISO 31000:2018 is not specific to any industry or sector. ISO 31000:2018 can be applied throughout the life of an organization, and to a wide range of activities, including strategies and decisions, operations, processes, functions, projects, products, services and assets.It also facilitates the application of many sector-specific standards, especially in the financial sector but also for IT, medical devices, or the automotive industry.Some of the major featuresof an effective ERM in place would endeavor with,
For organisations in any sector, ERM is an effective tool who wishes to perform early detection and analysis of the risks in a highly efficient manner. The implementation of Risk Management increases both the awareness of risk and of opportunity, and their pro-active approach helps to ensure positive business development in the future. ISO 31000:2018 can be applied to any type of risk, whatever its nature, whether having positive or negative consequences.
TRAIBCERT’s experienced and highly-skilled auditors would listen to you and perform an initial assessment to understand audit issues and maximize your chances of being certified.The audit focuses mainly on the areas of the system that needs further improvements inline with the standard’s requirements, in order to achieve the business objectives. Once identifying and eradicating potential vulnerabilities in the management system, the actual audit in relation to the certification begins.
This phase is comprised of a stage 1 and stage 2 audit consists of detailed review where, TRAIBCERT’s auditors with expertise and vast knowledge on the industry sectors, assess your documentation, interviews your teams, analyzes your practices, your data against the requirements of the standard inview of fulfilling the requirements. We strive to reveal observations that can add value through reduced costs, increased efficiency, and decreased time to market.
Once our highly competent & qualified auditors who are experts in the sector, identifies that yousatisfy the requirements of ISO 31000-2009, we TRAIBCERT a leading accredited certification body will Issue the ISO 31000-2009 certificate.
Annual surveillance of the ongoing optimization of your processes and management system would be carried out to ensure adherence of the system with that of the ISO standards.
Upon reaching 3 years from the date of issuance of certificate, the maximum validity of the certificate, we will provide full support to your organization towards the re-certification for the next term.