IOR issues latest Sound Practice Guide for Operational Resilience

The need for effective operational risk management is arguably now more acute than ever. Events such as the global financial crisis or the COVID-19 pandemic highlight the far-reaching impacts of operational risk and the consequences of management failure. In light of these and numerous events that have transpired, organisations must ensure that their policies, procedures and processes for the management of operational risk absolutely meet the needs of their stakeholders.

Aidan Brock PIOR SIRM, author of the Operational Resilience Special Practice Guide and an Institute of Operational Risk Advisory Committee member, explained: “COVID-19 has forced organisations to be more proactive in terms of how they approach and manage operational resilience. Practical implementation can take many forms depending on the size, scale and complexity of an organisation and the industry in which it operates. The most effective plans leverage and build on existing risk management frameworks and practice, particularly so when it comes to operational risk.”

Brock continued: “This document outlines the key elements of operational resilience and provides practical guidance to assist those building and embedding better resilience in their organisations.”

The new guidance is designed to complement existing standards and codes for risk management (for example ISO 31000). Those practitioners looking for a general understanding of the fundamentals of operational risk management should begin by accessing the IOR’s Certificate in Operational Risk Management.

*View the Operational Resilience – Operational Risk Sound Practice Guide here

Organisational Resilience Guides

Back in 2019, the Institute of Risk Management’s (IRM) Innovation Special Interest Group explored the theme of organisational resilience. Its work at that time focused on understanding how UK organisations defined – and how they were developing – resilience. 

Through this project, the Innovation Special Interest Group has reviewed guidelines, professional standards, White Papers, books and consultancy reports and also interviewed risk managers, Chief Risk Officers, Board members and consultants. In addition, the constituent members led discussions with IRM Special Interest Groups and Regional Interest Group members to gain additional perspectives on the topic. 

The Innovation Special Interest Group project focused on organisational resilience involved a total of more than 100 people from multiple sectors, countries and professional backgrounds joining forces to determine an holistic and integrated view of organisational approaches towards building resilience in organisations. 

The outcomes are presented in two guides: Organisational Resilience: A Risk Manager’s Guide and Organisational Resilience White Paper 2021: A Companion Summary for Risk Managers. 

Embedded in life

Organisational resilience is more embedded in life around us than many may at first think and, in point of fact, has been so for decades. National healthcare is an organisational resilience network, as is the police service, the other Emergency Services and the Armed Forces. One can argue with some degree of persuasion that the Government itself is also an incrementally evolving organisational resilience network. 

Perhaps the first true example of this methodology designed as such from the outset was the Chain Home radar network developed back in the 1930s and delivered as the world’s first integrated early warning system that connected analogue Command and Control with distributed tactical operations in near real-time to protect its national host.

Whether by accident or occasional design, organisational resilience has been an instinctive and historical concept that society has reached for where co-operative action can help to offset disruptive risks for either those currently unfolding or perceived in the future. 

Today, organisational resilience – and its enterprise risk management stablemate – should be an ultra-conscious infrastructure choice. The pandemic has forced change and focuses all eyes on the reality that the collective crisis spectrum is both broader and more threatening than ever. 

Interconnected world

Rodrigo Souza, the Innovation Special Interest Group co-chair who led the project, explained: “The global wrestling with COVID-19 – and the potential for new pandemics – as well as climate change, extreme weather disruptions, terrorism and cyber crime-centric risks threaten our digitally interconnected world. That’s precisely why the IRM’s Innovation Special Interest Group began taking a deep dive into organisational resilience in 2019. This report, and its companion summary, focuses on how organisations actively define and develop organisational resilience strategies and how approaches could – and should – be evolving in light of contemporary events.”

*The IRM is conscious of the fact that many risk and business professionals contributed their time, experience and intellect to build these reports. In addition to Rodrigo Souza, the organisation would also like to thank Sarah Gordon (the other co-chair) and members of the Innovation Special Interest Group for their work on this project