ISO 31000:2018 is an international standard that provides guidelines on managing risk faced by organizations. It aims to help organizations ensure that risk management is integrated into their overall governance, strategy, planning, management, reporting, policies, values, and culture.

Here are the key points of ISO 31000:2018:

1. Purpose

ISO 31000:2018 is designed to help organizations in:

• Creating and protecting value.
• Improving performance, encouraging innovation, and supporting the achievement of objectives.

2. Principles of Risk Management

The standard is built on eight key principles that make risk management effective:

• Integrated: Risk management is part of all organizational activities.
• Structured and comprehensive: A structured approach ensures consistent and comparable results.
• Customized: Risk management is aligned with the organization’s external and internal context.
• Inclusive: Involving stakeholders enables appropriate risk knowledge and perspectives.
• Dynamic: Risks can emerge, change, or disappear as an organization’s external and internal context changes.
• Best available information: The quality of risk management depends on the information that supports it.
• Human and cultural factors: Human behavior and culture influence risk.
• Continual improvement: Risk management is continuously improved through learning and experience.

3. Framework for Risk Management

ISO 31000:2018 emphasizes establishing a risk management framework that:

• Provides the foundation and arrangements for integrating risk management throughout the organization.
• Ensures that risk management is part of governance.
• Involves leadership and commitment at all levels.
• Requires planning, resources, and accountability.

4. Risk Management Process

The standard outlines a process to manage risk, which includes:

1. Risk identification: Recognizing what, how, and why things may occur that affect objectives.
2. Risk analysis: Understanding the nature, sources, and potential consequences of identified risks.
3. Risk evaluation: Comparing the level of risk with criteria to determine risk significance.
4. Risk treatment: Implementing measures to modify risk.
5. Monitoring and review: Continually checking and assessing risk environment and performance.
6. Communication and consultation: Engaging with stakeholders to ensure risk management is effective.

5. Benefits

Organizations that apply ISO 31000:2018 can achieve:

• Better decision-making through understanding risks and opportunities.
• A proactive approach to identifying and managing risks.
• Greater confidence from stakeholders.
• Improved compliance with legal, regulatory, and other requirements.
• Enhanced governance and organizational resilience.