ISO-31000-CLA ISO 31000 - Certified Lead Risk Manager Questions and Answers

According to ISO 31000:2018, a risk management framework consists of four critical elements: design (B), implement (D), evaluate (E) and improve (F)5. These elements guide an organization in integrating risk management into all functions and processes.

Communication with stakeholders, customers, and interested parties is an essential element for maintaining the relevance of enhanced risk management within the structure of a changing context3. Communication helps to establish trust, transparency, accountability, and feedback mechanisms for risk management.

According to 1, ISO 31000 is a family of standards relating to risk management codified by the International Organization for Standardization (ISO). It provides principles and guidelines on managing risks that could affect organizations.

According to , page 17, a crisis management team (CMT) is “a group of senior managers who have been delegated authority by an organization’s executive leadership team to make decisions during a crisis”. A centralized decision making structure allows for faster and more coordinated responses in an emergency situation.

Records and reports provide a continuing account of the risk management system2. They help to monitor and review the performance and effectiveness of risk management.

Risk management is tailored4. Tailored means that risk management takes into account the specific needs, objectives, and characteristics of each organization and its context.

 Enhanced risk management ensures that uncertainty is managed so the organization can meet its objectives4. Enhanced risk management involves applying a systematic and logical process to identify, analyze, evaluate, treat, monitor, review, and communicate risks.

ISO 31000:2018 consists of risk management principles, framework, and process that have been adopted as a national risk management standard by more than 60 countries23. It provides guidelines on managing any type of risk faced by organizations.

According to 1, systemic risk is “the possibility that an event at the company level could trigger severe instability or collapse an entire industry or economy”. It is different from other types of risks that affect only specific parts or aspects of an organization 2.

Risk management takes human and cultural factors into account1. Human factors include perception, judgment, behavior, and communication that influence risk management. Cultural factors include values, beliefs, norms, and expectations that shape the organization’s risk culture.

The day-to-day responsibility of a Chief Risk Officer within a large organisation is to ensure that all key risks are adequately managed and reported4. This involves overseeing the implementation of risk management policies, processes and systems across the organisation.

According to page 9-10 of source 2, risk management professionals organize internal and external information about the organization into categories such as stakeholders, strategic objectives, policies and procedures, risk appetite and tolerance, and risk culture. This categorization process facilitates the analysis and reporting of the risk information at a later stage, making it easier to understand and use.