ISO 31000 ERM

Question 1

What is ISO 31000

Answer 1

ISO 31000:2018, “Risk management—Guidelines,” is a simple and concise international standard and framework for the systematic development of enterprise risk management.

The purpose of ISO 31000 is to help organisations manage uncertainty.

Question 2

ISO 31000 - 8 Principles

The principles describe characteristics of effective and efficient risk management and should be used as a foundation for establishing an organisation’s ERM processes.

Answer 2

1. Integrated - Risk management is an integral part of all activities in an organisation
2. Structured and comprehensive - approach to provide consistent results
3. Customised - to the organisation’s operating environment, culture, and objectives
4. Inclusive - inclusive of all stakeholders, providing improved communications and risk management awareness.
5. Dynamic - uses an iterative cycle to generate continual improvement, organisational learning, and quick response to changing environments and emerging risks
6. Best information available - makes use of the best historical, current, and future-oriented information available. Relevant stakeholders need timely and clear information.
7. Behavioral and cultural factors - Risk management is influenced by organisational culture and staff behavior.
8. Continuous improvement - Learning and experience are used to continually improve risk management

Question 3

ISO 31000 - framework components - 6 components

The ISO 31000 framework components assist in integrating risk management into all organisational activities and functions

Answer 3

Leadership and commitment
Oversight by top management ensures that a risk management approach is integrated into all activities, promoting the value to the organisation and stakeholders.

Integration
Risk management should be a key aspect of governance. It should be aligned to the organisational purpose, strategy, objectives, and operations.

Design
The framework should be designed to fit the context of the organisation and demonstrate the commitment to risk management.

Implementation
Success requires stakeholder engagement and awareness. The framework ensures that a risk management process is included in all activities.

Evaluation
To evaluate the effectiveness of the framework, auditors should measure performance against indicators and expected behaviours.

Improvement
Organisations should continually monitor and adapt the framework to address identified gaps and incorporate enhancements.

Question 4

ISO 31000 - Implementation phase process - 6

Answer 4

1. Communication and consultation. Structured and ongoing communication and consultation occur with parties affected by operations
2. Establish context. - Defining the purpose and scope, identifying the external and internal context for the
   organisation, defining risk criteria
3. Risk assessment - including risk identification, analysis, and evaluation.
4. Determine risk treatment. Rational decisions are made about risk treatment (acceptance, avoidance, pursuit, reduction, and sharing).
5. Monitoring and review. Progress of treatment plans, existence and effectiveness of controls, are monitored and reviewed.
6. Record and report. Reports are made in the appropriate frequency and level of detail to the appropriate parties.