8 important topics of ISO 31000 version 2018

ISO 31000 is an international standard and is developed by the International Organization for Standardization (ISO). It provides guidelines and principles for effective risk management. The primary objective of ISO 31000 2018 is to increase the probability of achieving objectives, leverage the identification of threats and allocate resources for the treatment of risks.

Almost every company, regardless of its size, is susceptible to various risks. These risks can originate from both internal and external factors related to the business processes. Internal risks often include problems in manufacturing, machinery, human talent, communication, and other operational aspects. On the other hand, external processes such as reputation, poor quality products and sub-standard customer services also pose significant risks to companies.

Here, ISO 31000 risk management, an international methodology specifically designed to address risk management activities, comes as a savior. The principles of ISO 31000 solely aim to identify and manage unforeseen events.

Scope of ISO 31000:2018

The scope of ISO 31000 2018 is quite broad. It encompasses various principles, concepts, and guidelines aimed to help organizations enhance their risk management capabilities.

• It provides guidelines to manage risks customized to any organization of any size engaged in any activity.
• This process is not specific to any sector or industry type and can be applied to any type of risk.
• It covers the entire lifecycle required for organizational risk management.
• ISO 31000 can be applied at all levels and functions.
• It can be used to help manage and control all kinds of processes.

8 Important Topics of ISO 31000:2018

The eight principles that are the foundation of ISO 31000 and can empower a business to navigate uncertainties with more confidence are:

• Risk Management is Integrated into The Organization’s Processes

ISO 31000 emphasizes that risk management cannot be separated from the main activities of an organization. Rather, it is a part of decision-making in every department. Therefore, risk management needs to be considered embedded into the organization’s processes and is necessarily an integral part of management responsibilities.

• Risk Management is Structured and Comprehensive

Managing risk management processes in a systematic and structured way helps bring reliable results for the company. It contributes to more efficiency within the organization and also offers comprehensive results for everyone involved. Risk management is structured with definite guidelines and procedures to ascertain productivity and efficacy.

• Risk Management is Customized to an Organization

The risk management framework is customized and proportionate to the organization’s external and internal context and must relate to its objectives. It is critical to understand that risk management processes are not one-size-fits-all and need to be tailored according to the organization’s needs. Once the context is established, objectives can be captured and risk management is customized as per the unique needs of a company.

• Risk Management is Inclusive and Transparent

In order to be more effective, risk management activities should involve all stakeholders. This involvement enables to sharing of the knowledge and perception of the stakeholders and ensures that risk management stands as most relevant and up-to-date. Risk management also needs to stay transparent. It must be easy to understand and free of any confusing jargon.

• Risk Management is Dynamic, Fluid, and Responsive to Change

Since context and knowledge within an organization are dynamic, risk management must be adaptive and need to respond to continual change. As the organization changes, its risk management programs should also change. Successful organizations are those who are adaptive to change and can respond in an appropriate and timely manner.

• Risk Management Considers the Best Available Information

A high level of risk management is done by taking into consideration the information from the past, and present and also by anticipating future scenarios. It is crucial to consider historical and current data while making decisions, ensuring that actions are based only on the best available information. The risk managers must consider the limitations of the past and present information while ensuring that all known information is shared with the stakeholders.

• Risk Management Takes into Account Human Factors and the Company Culture

It is crucial to understand that risk management is deeply intertwined with human behavior and culture. Therefore, risk managers must remain cognizant of the influence of human and cultural factors throughout the implementation of risk management activities. Recognizing the capabilities and objectives of the individuals involved is essential to align them with the business goals and achieve organizational success.

• Risk Management Encourages and Drives Continual Improvement

By making and implementing strategies, risk managers undergo continuous improvement, ensuring the organization’s resiliency. Risk managers must strive to continually improve risk management efforts through PDCA (Plan, Do, Check, Adjust). PDCA is a cycle that assists an organization in continually improving when various factors change over time.

Risk Treatment with ISO 31000

Risk mitigation is formulating and selecting responses for risks, and involves a dynamic process of:

• Eliminating the risk
• Accepting the risk
• Reducing the reoccurrence of the risk
• Sharing the risk
• Planning and implementing the risk treatment
• Evaluating the effectiveness of the treatment
• Deciding if the risk is acceptable, if not carrying out the treatment

ISO 31000:2018 Lead Risk Manager Certification Training

ISO 31000 is a critical method that helps protect a company from various risks and also helps in complying with the legal requirements of international standards. Individuals looking to excel in the field of risk management can consider going for an ISO 31000 2018 training course from Knowlathon, an accredited training institute. This course provides the candidates with information regarding the core elements and teaches them how to effectively implement a risk management framework.

Conclusion

ISO 31000 is an international standard that enhances the risk management capabilities of an organization. By earning this certification, you will understand the principles and guidelines in ISO 31000 and will be able to allocate resources for the treatment of risks. Familiarizing with this standard will contribute towards your professional growth, career advancement, and success in the risk management field, and will offer both personal and professional benefits.

Click here to get you enrolled.