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ISO Principles of Risk Management

November 3 2011

The ISO principles of risk management have been established to help businesses in understanding how they can deal with these in a constructive manner that is acceptable in the business community.

For the first of the principles of risk management, there must be some value that will be obtainable by mitigating a known risk. If there is no added value to this interaction with the risk along with no negative effect, it can be delegated to being just an issue of little importance.

In making the right decisions involving the principles of risk management within a business, it must be an integral part of the daily business routine and part of the decision making processes at every step for any procedure no matter how small it may appear to be.

Of the principles of risk management that most are aware of is that any uncertainty or assumption involving your project that must be correctly addresses. This is how you will best be able to mitigate any negative impact of a risk on your project. This must be done in a systemic way that is structured in your risk management plan.

Also included in the principles of risk management is that every decision is made with the best possible information that is currently available at the time a decision is made.  Each of these decisions also has to be tailored made for each risk a conclusion is made on. Never assume one risk will be handled like any other just because they are similar.

One of the principles of risk management that is often forgotten or delegated to the bottom of importance is the human factor. This is sometimes justified, but not always. Never assume your staff or that of a third party vendor will not negatively affect the risk that might impact your project.

The principles of risk management  also have to include a plan that is transparent that is responsive to change. This will allow for an appropriate response to be made for each risk. With a risk plan in place there has to be a path for continuous improvement to it integrated into it. This will allow for an enhancement of how you mitigate the risk and the decisions on dealing with them in the future.