ISO 31022 – LEGAL RISK MANAGEMENT
Organisations operate in a complex environment with a variety of legal risks. Not only are organisations required to comply with the laws of all the countries within which they operate, legal and regulatory requirements can vary between different countries, strengthening the need for organisations to understand and have confidence in their processes. They also need to keep pace with changes to the legal and regulatory environment and review their needs as new activities and operations are developed. Organisations face considerable uncertainty when making decisions and taking actions that can have significant legal consequences. The management of legal risk helps organisations to protect and increase value.
Accordingly, in 2015, the International Organisation for Standardisation (ISO) approved a proposal for a new standard on the management of legal risk (ISO 31022). ISO 31022 has reached the final stages of development and is scheduled to be published in mid-2020 (the author of this article is the co-convenor of the ISO Working Group, which was responsible for drafting the standard).
The purpose of ISO 31022 is to provide guidance on activities that support organisations to assess and treat risk efficiently and cost effectively to meet the expectations of a wide range of stakeholders. By developing an improved understanding of the external and internal legal context, organisations may be able to develop new opportunities or improve operational performance. However, failure to meet the requirements and expectations of stakeholders can have considerable and immediate negative consequences that could affect an organisation’s performance and reputation and might lead to the criminal prosecution of senior management.
Jan-Mar 2020 Issue
CMS Cameron McKenna Nabarro Olswang LLP