Risks are inevitable in any organization of any type or size. These risks may be external or internal factors that may influence, in any way or form, activities within the organization. Guidance on how to tackle risks and challenges come in the form of ISO 3100.
But what is the purpose of ISO 31000? Why is ISO 31000 Risk Management so important?
All will be covered in this blog article, where ISO 31000 risk management will be the star of the show, and you can learn how to implement it. Let’s have a look at the things we will cover:
- What is the purpose of ISO 31000?
- Why is ISO 31000 Risk Management important?
- Is ISO 31000 a certifiable standard?
- What are the benefits of ISO 31000?
- What are the challenges of ISO 31000?
- How to implement ISO 31000?
What is the Purpose of ISO 31000?
So ISO 31000, as already established, deals with the notion of risk management. ISO 31000 is also known as the first international standard that put risk management as the core subject, which was published in 2009. This standard has been significantly improved in the latest version, published in 2018, to better address the risks that organizations face nowadays.
The purpose of ISO 31000 is to provide assistance to organizations by supplying a framework for a risk management system following a number of principles and guidelines. Any organization can adopt this framework, regardless of size, type or industry. It has proven vital for identifying internal and external risks, assessing and evaluating such risks, treating any non-conformities and taking preventive actions to mitigate and eliminate any current and future threats.
Regulatory compliances are often country- or activity-specific, which allows organizations to be very stringent in their day-to-day operations. Nowadays, most legal compliance requirements need a basis of risk analysis to ensure that organizations conduct the required analysis based on risk assessments.
This standard will aid risk managers in managing their risks, making decisions, setting aims and improving the performance of the organization’s teams.
The standard outlines the framework and guidelines of the risk management framework based on the six pillars:
Why is ISO 31000 Risk Management Important?
ISO 31000 is a critical tool for organizations. One may ask why, and to make life easier, a list has been compiled for your ease of understanding as to why ISO 31000 risk management is important.
Reason #1 | It improves decision making
With a framework for tackling risks and challenges, ISO 3100 is bound to make the management more aware of the dangers that certain decisions will carry. Therefore, before taking action, precautions will be taken to ensure that the decision being made is indeed the best one.
Reason #2 | Enhancing risk management practices
Let’s face it, many companies have only just started to take risk management seriously. We have all seen the consequences that can occur when the necessary precautions are not implemented. Establishing effective and efficient risk management practices will safeguard an organization on multiple levels.
Reason #3 | Increase in trust
The feeling of safety is something that many people seek. As a result, when stakeholders discover that your organization can provide such feeling, be them customers or shareholders, their trust and confidence in our organization will significantly improve
Reason #4 | Promote a risk-free culture
Is there something that is totally risk-free? Sadly, no. However, by advocating for a risk-free environment, you will generate risk awareness among your employees. So it has its benefits.
Reaosn #5 | Improve organizational resilience
In an ever-changing environment where everything is becoming digital and digital threats are rapidly evolving, being resilient to potential threats and spotting opportunities for improvement should always be kept a priority.
Is ISO 31000 a Certifiable Standard?
ISO standards are famously known for providing a certification or accreditation that highlights the organisation’s efforts towards improving the day-to-day business operations through continuous improvement.
When it comes to ISO 31000, the story takes a different spin. While it is still regarded as an ISO standard, ISO 31000 is a customizable risk management standard which has been developed solely to guide organisations in making informed decisions through a framework that prioritises the creation and protection of value in an organisation.
This framework provides an organisation with the necessary insight to recognise risks and opportunities and allocate the necessary resources to deal with such factors. And although ISO 31000 is not certifiable, it provides a framework that can be used as a cornerstone for any organisation – irrespective of its size and industry.
All in all, don’t be fooled, as having your organisation in line with ISO 31000 is something that you should be proud of as it truly shows your dedication to reaching stellar performances within all departments that make up the organisation.
Benefits of ISO 31000
For this reason, many organizations would do well to adopt such an ISO for the following benefits:
- Proven effectiveness: Being international standards, these are used by several organizations and thus were vetted countless times.
- Reduced legal exposure: By conducting risk analysis and finding key drivers, organizations may reduce risks that may lead to legal issues.
- Increase profits: When an organization mitigates risks, it reduces the probability of damage resulting from such a hazard.