London — The British Standards Institution (BSI) published BS 31100, a code of practice for risk management. The standard is designed to provide a basis for understanding, developing, implementing and maintaining risk management within any organization in order to enhance an organization's likelihood of successfully achieving its objectives. This British Standard establishes the principles and terminology for risk management, and gives recommendations for the model, framework, process and implementation of risk management.
BS 31100 is intended for use by anyone with responsibility for:
- Ensuring that an organization manages to achieve its objectives
- Ensuring risks are managed in specific areas or activities
- Overseeing risk management in an organization
- Providing assurance on an organization’s risk management
According to BSI, the new standard represents the view that organizations should encourage opportunism and implement a risk management framework to cope with uncertainty. That theory was tested, notes BSI, with its annual Business Barometer survey, the results of which were released today.
The research was conducted to coincide with the publication of BS 31100 Code of practice for risk management. According to the survey results, UK businesses are still prepared to take risks despite testing economic times. In fact, 74% of the UK’s FTSE 250 surveyed reported no difference in the willingness of their company to take risks now as compared with 12 months ago. Only 15% thought that their organization would be less disposed to risk taking.
The survey also found that:
- 93% of companies surveyed have both a risk management framework and risk management process in place
- 94% of companies employ a risk manager or someone who takes overall responsibility for risk
- 90% agreed that risk management reduces the likelihood of events that would have a negative consequence
- 87% of those surveyed believe that risk management protects revenue and enhances value for money.
Further findings include:
- 49% of organizations view risk taking as a primarily positive activity (22% said they viewed it as ‘very positive’)
- 93% agreed that risk management improves accountability, decision-making, transparency and visibility.
This eagerly anticipated British Standard establishes the principles and terminology for risk management and gives recommendations for the model, framework, process and implementation of risk management. It can be used by organizations of all sectors and sizes as a basis for understanding, developing, implementing and maintaining proportionate and effective risk management.
The drafting committee responsible for BS 31100 includes 40 representatives from industry, government and academia including the Financial Services Authority, the Confederation of British Industry, the Institute of Risk Management, Southampton University, the Institute of Business Ethics and the Department for Business, Enterprise & Regulatory Reform. Public interest in the standard has been so great that 3,000 comments were received on the first draft.
The recommendations of BS 31100 are generic and intended to be applicable and scalable to all organizations (or parts thereof) across the public and private sector, regardless of type, size and nature. How recommendations are implemented will depend on an organization's operating environment and complexity.
Source: British Standards Institution
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