Many organizations prefer to spend time debating how to approach risk management at the organizational level while successful organizations have developed methods and identified the major risks that can affect their results, using practices that increase their chances of success.
Organizations of all types and sizes face a range of risks that can affect the achievement of objectives. Organizational objectives refer to a range of activities, from strategic initiatives to the organization's operations, processes and projects, reflected in terms of social, environmental, technological safety, security and financial performance, commercial and economic measures, as well as social, cultural, political and reputational impacts.
The purpose of risk assessment is to provide information based on objective evidence and analysis to inform decisions on how to deal with certain risks and to select certain options. The organizational framework within which risk management is applied provides the policies, procedures and organizational arrangements that enable risk management to be applied throughout the organization at all levels.
Risk assessment attempts to answer fundamental questions:
- What can happen and why?
- What are the consequences?
- What is the likelihood of their occurrence in the future?
- Are there factors that reduce the consequences of the risk or reduce the likelihood of the risk occurring?
- Is the level of risk tolerable or acceptable and no additional treatment is needed?
The ISO 31000 standard provides an approach to risk management that enables an organization to proactively improve management, as well as management effectiveness and efficiency.
ISO 31000 helps organizations of all types and sizes to effectively and efficiently manage risk. ISO 31000 contains principles, frameworks and processes for managing any form of risk in a transparent, systematic and credible way in any scope and context.
The standard is an important ally in preventive risk analysis, protecting the growth of the organization, as well as the health and safety of the employees working within it.
Benefits of implementing and certifying the risk management process according to ISO 31000
Once the guidelines have been implemented and are continuously followed, risk management enables an organization to:
- encourage proactive rather than reactive management;
- be aware of the need to identify and address risks throughout the organization;
- improve the identification of opportunities and threats;
- comply with relevant legal and regulatory requirements and international standards;
- improve financial reporting;
- improve corporate governance;
- improve stakeholder confidence;
- establish a reliable basis for decision-making and planning;
- improve controls;
- allocate and use resources effectively and efficiently to deal with risks;
- improve operational effectiveness and efficiency;
- improve occupational health and safety, information security, food safety and pollution prevention;
- improve incident management and prevention;
- minimize losses;
- improve organizational learning;
- improve organizational resilience and sustainability.
The ISO 31000 approach to risk management can be adopted for all activities of an organization, including projects, defined functions, products or activities, and in turn strengthen the links between these activities and the overall objectives of the organization.
Certification to ISO 31000 demonstrates that an organization has a risk management process that conforms to an international standard and can be considered a positive signal to potential customers, investors and business partners.
ISO 31000 risk management process certification with SRAC leads to:
- Improving the organization's image in front of customers;
- Making the most of market opportunities;
- Improving the organization's management system;
- Gaining the trust of partners on the internal and international market;
- Associating the organization's image with the leader in Romanian certification.
