What is ISO 31000?

In a world of constant change, risk management is increasingly important to your business, and ISO 31000 is an important step in evolving it. So what is ISO 31000? It is an international risk management standard that gives organisations in any sector guidelines for creating a comprehensive risk management framework and process. So why is it so important to manage risk? And what are the potential benefits of ISO 31000?

This is part one in a series of blogs where we’ll look at what ISO 31000 means in the context of your business, and delve into the key clauses, how you can meet them and the positive impact this will have on managing risk within your organisation.

What is ISO 31000?

ISO 31000 is the international standard for risk management, published by the International Organization for Standardization (ISO). It provides principles, a framework and a process for managing risk, and it can be applied to any organisation, of any size, in any sector. It is a set of guidelines rather than a certifiable standard, so it helps you build and improve your approach to risk rather than prescribing exactly how to do it. Ideagen Risk Management can help you put that approach into practice.

Why manage risk?

Every week, there are countless examples of organisations that have hit the headlines because they have not effectively managed risk. United Airlines, Volkswagen and Tesco are but a few examples from the past few years of organisations that failed to manage weaknesses and threats effectively. Failing to manage risk is not only expensive and damaging to your reputation, it also means your organisation is missing out on many opportunities.

A common language

ISO 31000 outlines risk principles, including an introduction to the common vocabulary used in risk management processes. By using the standard as a guide to create your risk management processes, a common language prevents miscommunication and strengthens overall understanding.

ISO standards such as ISO 9001:2015 have changed the mindset of organisations towards risk-based thinking as a cultural issue rather than just the role of the quality team. This means a cultural shift that includes the responsibility of individuals across an organisation for a risk-aware culture. A common language improves communication between staff about risk management and introduces the concept of risk as the responsibility of all, rather than one small team.

A framework, not a process

ISO 31000, like other standards, addresses the ‘what’ far more than the ‘how’ and the ‘why’ of implementation. The idea behind ISO 31000 is to create a framework from which to build your risk management process. It is not an instruction on how to assess risk.

The flexibility of this framework means that it applies to any organisation, anywhere in the world, of any size.

Benefits of ISO 31000

The key benefits of implementing ISO 31000 include:

• Identifying business, operational, external, internal and workplace risks in a standardised process
• A common understanding of risk principles across key stakeholders in an organisation
• Realising potential opportunities
• Identifying the risk appetite and risk culture of the organisation
• Aligning business objectives with risk appetite
• Introducing risk management concepts to ease the transition to other standards such as ISO 27001 and ISO 9001:2015
• Allocating resources more efficiently, in line with perceived risk levels
• More efficient business operations

There are many more individual benefits to implementing ISO 31000, depending on an organisation’s particular needs, environment and lifecycle stage.

Read our article ‘Why it's Important to be Risk Aware’ to discover why your business should manage risk, and remember to share this article with any colleagues who might also be asking ‘what is ISO 31000?’