AS/ISO31000:2018 is a document that outlines the general principles and guidelines that guide organizations in managing risks. Various versions of AS/ISO31000 are produced occasionally, containing updated guidelines (Hutchins, 2018). Due to the constant changes brought by various factors such as technology, organizations tend to face new risks that affect their progress. Therefore, the updated version AS/ISO31000 outlines the main risk areas for organizations to respond effectively (Hutchins, 2018). This paper analyzes the history of AS/ISO31000, why it was developed, and why it is essential for organizations to comply with the standards.
History and Description
The growing need for effective risk management by companies played a vital role in developing AS/ISO31000 standards. The first version of AS/ISO31000 was produced in 2009 by the International Organization for Standardization (ISO) (Hutchins, 2018). ISO is an independent international body composed of representatives from different organizations responsible for national standards (Martins et al., 2021). This body sets common standards that guide organizations on the various ways to manage risks. The AS/ISO31000:2018 document was produced as an improved version of the 2009 version (Martins et al., 2021). It outlines principles and guidelines that organizations can implement during risk management and recommends various risk management processes employed at any decision-making level, including individual, private or public enterprises. This document is not directed towards a specific industry but involves all sectors that engage in operations that involve risks.
The document is divided into four main sections that describe the risk management framework. The first section involves the definitions of essential terms in understanding risks. Common terms defined in the document include risk, sources of risks, risk management, probability of occurrence, consequences of risks, stakeholders, and control (Hutchins, 2018). The second section consists of the principles guiding the handling of risks. This section describes the best structure that can be employed in managing risks. The structure should consider human and cultural factors affecting the organization. The third section involves a framework on how risk management can be effectively implemented and integrated into the organization. It also includes reviewing and constantly improving the framework to prevent future occurrences of other risks. The fourth section consists of the management process, including factors that help identify risks, the tools of risk analysis, and the assessment process (Hutchins, 2018). It also involves the monitoring process that is essential in preventing other risks.
Importance of the Document
AS/ISO3000:2018 has been significant in guiding organizations to manage the risks that threaten their progress. The guidelines provided in the document are designed in a common approach that any industry can employ in managing its risk. Managing risks is essential in determining the success of an organization (Alijoyo & Fisabilillah, 2021). Businesses that manage their risks effectively tend to succeed more easily than those without proper risk management schemes. Identifying the risks that an organization is likely to encounter has been one of the challenges that most managers face. The AS/ISO3000 provides a mechanism that can help an organization easily identify potential risks and state the procedures employed to manage such risks. Organizations must comply with the principles outlined in the document to ensure that they identify risks early and handle them effectively before they affect normal operations. Risks have been one of the elements that threaten the progress of any business (Alijoyo & Fisabilillah, 2021). Many companies have collapsed due to a lack of a framework in handling risks.
Conclusion and Recommendations
Conclusively, the AS/ISO3000 document provides the framework that businesses can follow to identify, assess risks, and eliminate future threats to achieve their objectives easily. Organizations should make their policies in line with the principles of the document. This will enable them to identify and assess risks in time. Employees should also be educated on the document’s contents to make it easier to identify threats while on duty. Lastly, companies that succeed in implementing the AS/ISO3000:2018 document should be certified by ISO to conduct risky operations.
Alijoyo, F. A., & Fisabilillah, A. F. M. (2021). Risk management implementation in public sector organizations-global phenomena. International Journal of Current Science Research and Review, 4(03).
Hutchins, G. (2018). ISO 31000: 2018 enterprise risk management. Greg Hutchins.
Martins, Y. S., Silva, C. E. S. D., & Gaudencio, J. H. D. (2021). From theory to practice: A risk management model for SMEs in the context of ISO 9001. Production, 31.