When an organization wants to implement risk management, we can’t ignore the importance of risk culture. Why is it so important? Kevin Knight, Chair of ISO project committee ISO/PC 262, Risk Management and founding member of the Standars Australia/New Zealand Joint Technical Commitee OB/7 explained the effectiveness of risk management. He is an expert in ISO Risk Management and have had a wide experience on it.
Kevin said that risk management is a mandatory guidance which is very important in business process. “The company who wants to develop its business will meet uncertainty,” Kevin said. He added that uncertainty had so much significant impact to its business process. Nurturing risk management is company’s top priority if they want to grow up. In simple statement, Kevin said that cultivating risk management could start by adopting ISO 31000. “Developing risk management is very crucial,” he continued.
Many companies are questioning why they need to cultivate risk management? Kevin said that ISO 31000 contains so many standards which is a guideline and tools to maximize profit along with reducing the threat. He also added, “It is not about making the business risk free but rather encourages it to understand the environment in which it is operating and to manage risk at the highest tolerable level.”
An effective risk management culture eventually will influence business value for the company. “There are so many ways to do for enhancing company’s business value by adopting risk management. All of them have been regulated in ISO 31000,” Kevin said. “One simple way for enhancing business value is identifying and making an assessment for every possible risk that likely to happen,” he continued. In order to do so, every companies needed to gather a lot of information related to that risk. “An accurate information is important for decision makers. That information can help risk management department to manage and mitigate it if necessary,” he said.