ISO 31000 Risk Management

April 18, 2024•4 minute read

ISO 31000:2018 Risk management — Guidelines is an international standard that provides principles, a framework and a process for managing risk. It can be used by any organization regardless of its size, activity or sector.

ISO 31000 can help organizations:

increase the likelihood of achieving objectives;

improve the identification of opportunities and threats;

effectively allocate and use resources for risk treatment.

While, ISO 31000 cannot be used for certification purposes, it does provide guidance for internal or external audit programmes. Organizations can compare their risk management practices with an internationally recognized benchmark, providing sound principles for effective management and corporate governance.

Introduction

1 Scope

2 Normative references

3 Terms and definitions

4 Principles

5 Framework

5.1 General

5.2 Leadership and commitment

5.3 Integration

5.4 Design

5.5 Implementation

5.6 Evaluation

5.7 Improvement

6 Process

6.1 General

6.2 Communication and consultation

6.3 Scope, context and criteria

6.4 Risk assessment

6.5 Risk treatment

6.6 Monitoring and review

6.7 Recording and reporting

ISO 31000:2018

Implementation

Implementing risk management in an organization in conformity with ISO 31000 involves several key steps.

Here are those steps.

Establish the Context

Define the external and internal context relevant to risk management.
Consider the organizational objectives, stakeholders, and the risk management scope.

Define Risk Management Policy and Objectives

Develop a risk management policy that aligns with the organization’s overall objectives.
Set specific and measurable risk management objectives.

Integrate with Organizational Processes

Ensure that the risk management process is integrated into the organization’s governance and management functions.
Align risk management with other organizational processes and activities.

Assign Roles and Responsibilities

Clearly define roles and responsibilities for individuals involved in the risk management process.
Ensure that everyone understands their role in managing risks.

Communicate and Consult

Establish effective communication channels for risk-related information.
Consult with internal and external stakeholders to gather diverse perspectives on risks.

Establish the Risk Management Framework

Develop a risk management framework that includes policies, processes, and tools.
Define the criteria for risk assessment and decision-making.

Identify Risks

Systematically identify risks that could affect the achievement of objectives.
Consider both internal and external sources of risk.

Risk Assessment

Evaluate the likelihood and impact of identified risks.
Prioritize risks based on their significance to the organization.

Risk Treatment

Develop and select appropriate risk treatment options.
Prioritize actions to address and mitigate identified risks.

Monitor and Review

Establish a monitoring and review process to track the effectiveness of risk treatments.
Regularly review risk assessments and update risk information.

Record and Document

Document the entire risk management process, including risk identification, assessment, and treatment.
Maintain records of decisions, actions, and outcomes.

Continual Improvement

Implement processes for continual improvement of the risk management framework.
Learn from past experiences and adjust the risk management approach accordingly.

Training and Awareness

Provide training to personnel involved in the risk management process.
Raise awareness of the importance of risk management across the organization.

Review the Risk Management Framework

Periodically review the risk management framework to ensure its relevance and effectiveness.
Update the framework based on changes in the organization’s context.

Report and Communicate Results

Develop a reporting mechanism for communicating risk-related information.
Share relevant risk information with stakeholders, including successes and challenges.

Establish a Risk Culture

Foster a risk-aware culture within the organization.
Encourage open communication about risks and the importance of managing them effectively.

Review External and Internal Context

Regularly review the external and internal context to identify emerging risks.
Consider changes in the business environment, technology, regulations, and other factors.

Legal and Other Requirements

Identify and ensure compliance with relevant legal and regulatory requirements related to risk management.

Integration with Decision-Making

Integrate risk considerations into the organization’s decision-making processes.
Ensure that risk assessments inform strategic and operational decisions.

In conclusion…

Remember, the implementation of risk management is an ongoing process. Organizations should regularly review and update their risk management practices to ensure they remain effective in addressing the evolving challenges and opportunities in the business environment.