The Principles of Risk Management

Risk management is another term for proactive, effective management. In any way of working Risk Management enables the decision makers greater freedom to grow and work on the organisation rather than deal with issues within the organisation.

As we have discussed in other blogs, such as The benefits of Risk Management, the purpose of risk management is the creation and protection of value. Risk management is important to ensure you get greater consistency and efficiency in your organisation. 

By minimising disruption and streamlining the process a team is more likely to achieve the outcomes or objectives it has set. In addition to outputs, your team members have greater certainty, your people are generally happier, and your culture becomes more resilient.

The Principles of Risk

In the development of systems, it is always best to start with first principles. This is easy for risk as ISO (International Organization for Standardization) has already published the eight key principles that underpin risk in ISO 31000: 2018 Risk management Guidelines.

Here they are in summary:

  • Integrated,
  • Structured and Comprehensive, 
  • Customised,
  • Inclusive,
  • Dynamic,
  • Best Value Information,
  • Human and Cultural Factors, and
  • Continual Improvement.

Risk Based Approach

As a leader, your commitment to the principles listed above will support a culture that is willing to identify the potential upside and downside when making decisions. Your people will enjoy greater autonomy and you will have less drama in your day.

Organisations that clearly articulate their appetite for risk and know what their organisation, including people, can tolerate will outperform other organisations over the longer term.

If you or your team need an update on risk or the support of one of our risk professionals please contact us for your one hour confidential conversation today. If you have any specific aspects, you’d like more information on or if you have further questions, reach out by clicking here!

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