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DRM 2019 > Unit 2 - ISO 31000: 2018 > Flashcards

Unit 2 - ISO 31000: 2018 Flashcards

1
Q

What does ISO stand for?

A

International Standards Organisation

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2
Q

What does Annex SL describe?

A

Seven substantive components of a mgmt system standard

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3
Q

What does ISO 31000 provide detailed guidelines on?

A

PIML - Plan, Implement, Measure and Learn

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4
Q

What does ISO 31000 provide less explicit info on?

A

The context, leadership and support features required of a mgmt system standard

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5
Q

What is a mgmt system?

A

Framework of policies, processes and procedures employed by an org to ensure it can fulfil tasks required to achieve its purpose and objectives

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6
Q

What are the Scope and Design components of mgmt systems?

A
  1. Context
  2. Support
  3. Leadership
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7
Q

What are the Control and Develop components of mgmt systems?

A

PIML:-

  1. Plan
  2. Implement
  3. Measure
  4. Learn

(Also known as Plan, Do, Check, Act)

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8
Q

What do we mean by “Context” within mgmt systems?

A

Organisation, stakeholder expectations and scope of the mgmt system.

More specifically for risk management…
- To define internal and external parameters that organisations must consider when managing risk.

The purpose is to customise the risk mgmt process, enabling effective risk assessment and appropriate risk treatment.

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9
Q

What do we mean by “Support” within mgmt systems?

A

Resources, competence, awareness, communication and documentation

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10
Q

What do we mean by “Leadership” within mgmt systems?

A

Commitment, policy and organisational roles and responsibilities

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11
Q

What do we mean by “Plan” within mgmt systems?

A

Mgmt system objectives and planning to achieve them

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12
Q

What do we mean by “Implement” within mgmt systems?

A

Operational planning, implementation and control

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13
Q

What do we mean by “Measure” within mgmt systems?

A

Monitoring, measurement, analysis, evaluation, audit and review

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14
Q

What do we mean by “Learn” within mgmt systems?

A

Non-conformity, corrective action and continual improvement

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15
Q

What do formal mgmt systems have?

A

Defined, documented procedures intended to implicitly manage processes.

Auditable stds developed for each activity or process

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16
Q

What do informal mgmt systems have?

A

Implicit and may incl roles and responsibilities, audits and mgmt of change

17
Q

Due to ‘disruption’, what does the World Economic Forum (WEF) say doesn’t work any more?

A

Ideas of incremental progress, continuous improvement and process optimisation

18
Q

What is meant by ‘disruption ‘?

A

The current competitive landscape

19
Q

What 4 areas for improvement come from proactive approach to risk

A
  1. Strategy - risks fully analysed, better strategic decisions
  2. Tactics - consideration of risk in the selection of tactics
  3. Operations - ID of events that can cause disruption, taking action to reduce
  4. Compliance - enhanced due to recognition of risks associated with failure to comply
20
Q

What six areas of risk do most organisations need to manage?

A
  • Variable cost or availability of raw materials
  • Cost of retirement / pension / social benefits
  • Increasing importance of intellectual Property (IP)
  • Greater supply chain and joint venture dependency and complexity
  • Reputation becoming more important and more vulnerable
  • Regulatory pressures and legislative requirements increasing
21
Q

What info on risk mgmt do Boards expect to see?

A
  • Governance and Culture
  • Strategy and Objective setting
  • Performance
  • Information
  • Communications and Reporting
  • Review and Revision of practices to enhance org performance
22
Q

What is a danger of implementing ISO 31000?

A

That output forms a stream of mgmt info separate from other info reqd to successfully run the org

23
Q

What is the definition of ‘Risk’?

A

The effect of uncertainty on objectives.

Usually expressed in terms of risk sources, potential events, their consequences and their likelihood

24
Q

What does ISO 31000 consist of?

A
  • Risk Mgmt Principles
  • Risk Mgmt Framework
  • Risk Mgmt Process
25
Q

What are the eight ISO 31000 Risk Mgmt Principles?

N.B. The first five align to ‘PACED’, and relate to how a risk mgmt initiative should be designed. The final three relate to how it should operate.

A

Value Creation and Protection via:

  • Integrated into all activities
  • Structured and Comprehensive
  • Customised and proportionate
  • Inclusive - stakeholder engagement
  • Dynamic - anticipates, detects, acknowledges and responds to chg
  • Considers limitations on Available Info
  • Human and Cultural Factors
  • Continual Improvement through learning and experience
26
Q

What are the components of the ISO 31000 Risk Mgmt Framework?

A

Leadership and Commitment is central, in conjunction with:

  • Integration
  • Design
  • Implementation
  • Evaluation
  • Improvement
27
Q

What are the components of the ISO 31000 Risk Mgmt Process?

A

Scope, Context (objectives and internal, external and risk mgmt), Criteria (risk appetite), then…

Risk Assessment through:

  • Risk Identification
  • Risk Analysis
  • Risk Evaluation, then…

Risk Treatment

Surrounded by…

  • Communication and Consultation
  • Monitoring and Review
  • Recording and Reporting
28
Q

What is the purpose of risk mgmt according to ISO 31000?

A

The creation and protection of Value

29
Q

What is ‘PACED’?I

Principles of Risk Mgmt

A 
Proportionate
Aligned
Comprehensive
Embedded
Dynamic
30
Q

What is the purpose of ISO 31000?

A

Integrating the mgmt of risk into a strategic and operational mgmt system

31
Q

What is the focus of the 2017 COSO (Committee of Sponsoring Organisations of the Treadway Commission) Double Helix?

A
  • Governance and Culture
  • Strategy and Objective setting (incl Risk Appetite)
  • Performance
  • Review and Revision
  • Information, Communication and Reporting
32
Q

What are four established methods of Risk Assessment?

A

1) Checklists and Questionnaires
2) Workshops and Brainstorming
3) Inspections and Audit
4) Flowcharts and Dependency Analysis

33
Q

What is ‘Risk Perception’?

A

Bias in the identification of risks by our perceptions. One may view as significant, another not.

Based on our ‘World View’ of risk - how individuals view the reality of a given situation.

34
Q

What are the objective and subjective realities of risks?

A

Objective - likelihood it will rain tomorrow

Subjective - human perception of the risk, shaped by psychological factors, cultural factors, which may result in over/under statement of the severity

35
Q

What are some of the problems with different risk perceptions?

A
  • Differing perceptions on what a risk is (risk ID)
  • People hide or falsify risks for self-interest (risk ID)
  • Differing views on likelihood (risk analysis)
  • Different knowledge (risk analysis)
  • Deliberate under/over statement of severity for self-interest (risk analysis)
  • Differing views on what acceptable (risk evaluation)
  • Incorrect or inconsistent data collection for assessment and treatment
  • Some risks are ‘unknown unknowns’
36
Q

What are two real dangers that may result from differing risk perceptions?

A

1) Organisations mge same risks very inconsistently depending upon the individual managing it
2) Risk Mgrs may seek to achieve greater kudos through focus of efforts on managing stakeholders fears of perceived greatest risks, rather than those that are actually the most significant

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