BSI BS 31100 Standard Addresses Risk Management
November 5, 2008 // Published as a news service by IHS
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BSI British Standards published British Standard (BS) 31100 - Code of practice for risk management, which establishes the principles and terminology for risk management and gives recommendations for the model, framework, process and implementation of risk management.
According to BSI, the standard can be used by organizations of all sectors and sizes as a basis for understanding, developing, implementing and maintaining proportionate and effective risk management.
"If you read any CEO survey these days, the top answer as to what's keeping them awake at night will be economic volatility," Julia Graham, chair of the BS 31100 drafting committee, said.
"The credit crunch and what has followed has woken boards up to the fact that failures in risk management are fundamental problems and part of the reason why they are in the position they are in now," Graham said.
"[BSI] BS 31100 raises the profile of risk management at just the right time, and I think it could become a benchmark for organizations that do not want to make the same mistakes others have made."
According to research conducted by BSI to coincide with publication of BSI BS 31100, U.K. businesses are still prepared to take risks despite testing economic times.
According to the BSI British Standards annual Business Barometer, 74% of the Financial Times and the London Stock Exchange (FTSE) 250 surveyed reported no difference in the willingness of their company to take risks now compared with 12 months ago. Only 15% thought that their organization would be less disposed to risk taking.
The survey also found:
- Of companies surveyed, 93% 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.
- 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.
Source: BSI Group.