• Governance I Risk I Compliance Management

What are the components of ISO 31000:2018 Risk Management?

October 18, 2021

Limiting threats is a significant part of the triumph of any organisation. That’s why ISO (International Organization for Standardization) established the 31000:2018 Risk Management Standard. Issued in 2009, the standard facilitates operational continuity, while also ensuring confidence and reassurance in your organisation’s fiscal resilience, professional status, and ecological and security outcomes. The best part is that the ISO 31000 can be customised to your organisation to better accomplish the finest outcomes possible.

1. Doctrine

The objective of risk management is to safeguard the innovation and security of value. The standard works to enhance performance, promotes originality and reinforces the achievement of goals. Doctrines comprise of the prerequisite for the risk management initiative to be (1) customised; (2) comprehensive; (3) structured and thorough; (4) integrated; and (5) active.

2. Framework

The purpose of the risk management (RM) framework is to assist with integrating risk management into all activities and functions. The effectiveness of risk management will depend on integration into governance and all other activities of the organisation, including decision-making.

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2.1. Leadership and commitment, including:

  • positioning risk management with the policy, aims and culture of the organisation.
  • announcing a statement or policy that determines the RM methodology, proposal, or course of action.
  • producing essential resources which are made accessible for managing risk; and
  • determining the extent and form of risk that may or may not be taken (risk appetite).

2.2. Assimilation, including:

  • governing administration culpability and oversight roles and responsibilities; and
  • safeguarding and acknowledging that risk management is part of, and not separate from, all facets of the organisation.

2.3. Design, including:

  • A clear perception the organisation and its internal and external context.
  • conveying risk management dedication and apportioning resources; and
  • instituting communication and consultation procedures.

2.4. Execution, including:

  • fostering an applicable execution proposal consisting of deadlines.
  • identifying where, when, and how diverse types of decisions are made, and by whom.
  • altering the appropriate decision-making practices where required.

2.5. Evaluation, including:

  • calculating framework performance against its intent, performance, and behaviours.
  • defining whether it remains appropriate to support the attainment of objectives.

2.6. Improvement(s), including:

  • persistently supervising and modifying the framework to address external and internal changes.
  • taking measures to advance the value of risk management; and
  • upgrading the appropriateness, competence, and efficacy of the RM framework.

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3. Process

The risk management process necessitates the methodical application of guidelines, procedures and practices to the movements of collaborating and consulting, determining the perspective and evaluating, handling, examining, revising, recording and reporting risk.

3.1. Communication and consultation, including:

  • creating various areas of expertise simultaneously for each step of the RM process.
  • guaranteeing diverse views are respected when specifying risk criteria and assessing risks.
  • delivering sufficient data to accelerate probability oversight and decision-making; and
  • erecting a sense of breadth and ownership among those affected by risk.

3.2. Range, framework along with benchmarks, including:

  • delineating the objective and scope of risk management pursuits;
  • recognising the peripheral and core perspective for the organisation;
  • specifying risk criteria by specifying the acceptable amount and type of risk; and
  • defining criteria to evaluate the significance of risk and to support decision-making;

3.3. Risk assessment, including:

  • risk identification to find, recognise and describe risks that might help or prevent achievement of objectives and the variety of tangible or intangible consequences;
  • risk analysis of the nature and characteristics of risk, including the level of risk, risk sources, consequences, likelihood, events, scenarios, controls and their effectiveness; and
  • risk evaluation to support decisions by comparing the results of the risk analysis with the established risk criteria to determine the significance of the risk.

4. Risk treatment, including:

  • selecting the most appropriate risk treatment option(s); and
  • designing risk treatment plans specifying how the treatment options will be implemented.

5. Assessment and review, including:

  • improving the quality and effectiveness of process design, implementation and outcomes;
  • monitoring the RM process and its outcomes, with responsibilities clearly defined;
  • planning, gathering and analysing information, recording results and providing feedback; and
  • incorporating the results in performance management, measurement and reporting activities.

6. Recording and reporting, including:

  • communicating risk management activities and outcomes across the organisation;
  • providing information for decision-making;
  • improving risk management activities; and
  • providing risk information and interacting with stakeholders.

Getting Started with ISO 31000 Risk Management?

ISO 31000 is an international standard issued in 2009 by ISO (International Organization for Standardization). All types and sizes of organisations face internal and external factors that directly impact whether an organisation can achieve their objectives or not. ISO 31000:2018 serves as a guide for the design, implementation and maintenance of risk management, ISO 31000:2018 describes a systematic and logical process, during which organisations manage risk by identifying it, analysing it, and then make a determination as to mitigating the risk treatment in a way that is consistent with their risk appetite. An organisation can implement risk management across the entire company, and it can do so at any time. Our newly published “ISO 31000 Risk Management: A guide to identify, analyse and mitigate risk” playbook covers everything you need to know about ISO 31000:2018; here’s a quick rundown of the playbook structure:

  • What is ISO 31000?
  • Why is this Standard a good idea?
  • What are the benefits for my business?
  • Principles of ISO 31000:2018
  • ISO 31000 framework
    • Why was it revised?
    • What are the main differences?
  • Key Clauses of 31000:2018
  • Who is the standard for?
  • The process
  • The link between 31000:20180 and other standards
  • Importance of risk management leadership
  • 31000:2018 and continuous improvement
  • How do we get started?

> Risk management is a full-time, ongoing endeavour for organisations in today’s business world, and it poses constant challenges. The first part of reducing risk is having a strategy, and taking action. So DOWNLOAD your free playbook now!