Risk Management Standard Squabble

An interesting article in the European Commercial Risk Europe titled "Hopkin calls for end to risk management standard squabble" discusses the squabble between the use of ISO 31000 and the COSO ERM Cube shown below.

COSO ERM Cube

Essentially the point being made is that the failure to adopt a single approach creates confusion and loss of traction in the market place.

From R2A’s perspective, this confusion was inevitable. The attempt to make market risk and safety risk operate under a single risk management approach was always a nonsense as has become increasingly obvious.

For example, the idea that ‘risk appetite’ can be applied to high consequence, low likelihood safety issues is simply irrational, and in breach of the model WHS legislation. This matter is being discussed in the paper being presented at the AMPI conference above. With regard to the pilotage of ships in and out of Sydney Harbour and Port Botany, the use of ISO 31000 is specifically rejected in favour of the precautionary approach required by the WHS legislation.