The FINANCIAL -- Two recently published ISO standards on risk management have just been joined by a third on risk assessment techniques.

Together, they provide organizations of all types with a well-stocked toolbox for tackling situations that could affect the achievement of their objectives.

ISO/IEC 31010:2009, Risk management – Risk assessment techniques, has been developed jointly by ISO and its partner IEC (International Electrotechnical Commission)

Risks affecting organizations may have consequences in terms of societal, environmental, technological, safety and security outcomes; commercial, financial and economic disciplines, as well as social, cultural and political reputation impacts.

When risks occur, organizations always have to ask the question: "Is the level of risk tolerable or acceptable, and does it require further treatment? "

Risk assessment is an integral part of risk management which provides a structured process for organizations to identify how objectives may be affected. It is used to analyse the risk in terms of consequences and their probabilities, before the organization decides on further treatment, if required.

Risk assessment provides decision-makers and responsible parties with an improved understanding of risks that could affect achievement of objectives, as well as of the adequacy and effectiveness of controls already in place. The standard provides a basis for decision about the most appropriate approach to be used to treat particular risks and to select between options.

ISO/IEC 31010:2009 will assist organizations in implementing the risk management principles and guidelines provided by the recently published ISO 31000:2009, itself complemented by ISO Guide 73:2009 on risk management vocabulary. The latest standard deals with:

Risk assessment concepts

Risk assessment process

Selection of risk assessment techniques.

The standard reflects current good practice and answers the following questions:

What can happen and why?
What are the consequences?
What is the probability of their future occurrence?

Are there any factors that mitigate the consequences of the risk or that reduce the probability of the risk?

The application of a range of techniques is introduced, with specific references to other International Standards where the concept and application of techniques are described in greater detail. Risk assessment is not a stand-alone activity and should be fully integrated into the other components in the risk management process.

Eric Mahy, Project leader of the standard comments, "ISO/IEC 31010 has been developed for application by both the risk management novice and the seasoned risk professional. It forms part of an integrated risk management structure of standards, developed with a view to providing a 'best practice' approach."

ISO/IEC 31010:2009 has been prepared by IEC technical committee 56, Dependability together with the ISO Technical Management Board's risk management working group.

It is available from ISO national member institutes. It may also be obtained directly from the ISO Central Secretariat, price 252 Swiss francs, through the ISO Store or by contacting the Marketing, Communication & Information department.

Related Stories

• PUMA sets up 100% subsidiary in Israel
• ISO's magazine focuses on standards and crisis management
• Over 25 years of successful collaboration between adidas and Bayer MaterialScience