Six principles for effective risk management

This is a great summary of risk management principles. To be effective, risk management doesn’t have to be complex. And yes risk management is really not about managing risks 🙂

Norman Marks on Governance, Risk Management, and Audit

In World-Class Risk Management, I review the eleven principles in the ISO 31000:2009 global risk management standard and condense them to just six. (Later in the book, I discuss a possible risk management maturity model as well as what it takes to go beyond simply effective to deliver world-class value.)

  1. Risk management enables management to make intelligent decisions when setting strategy, planning, making decisions, and in the daily management of the organization. It provides reasonable assurance that performance will be optimized, objectives achieved, and desired levels of value delivered to stakeholders.
  2. Risk management provides decision-makers with reliable, current, timely, and actionable information about the uncertainty that might affect the achievement of objectives.
  3. Risk management is dynamic, iterative and responsive to change.
  4. Risk management is systematic and structured.
  5. Risk management is tailored to the needs of the organization and updated/upgraded as needed. This takes into account the culture of the…

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