ADVISORY

In case of Certification under ISO Standards, a few important value drivers may be highlighted for reference.

First and foremost is that the governance is strong in the process of establishing and managing Accreditation Bodies and they being empowered to Certify successful organizations under the specified standards – which prevents misuse of the Certification Process.

The second important advantage is the requirement of an independent external audit or surveillance to verify the status of compliance with requirements of the standards.

The third significance is that the standards on one hand are based on years of best management practices – but at the same time provide generic frameworks and guidelines enabling different types of entities to use the standards as per their characteristics and requirements – while maintaining the essential elements of the standards.

Many benefits are enjoyed by entities who are successful in acquiring Certification by Accreditation Bodies such as:

Enhanced Credibility and Trust: Certification by a recognized accreditation body boosts credibility, demonstrating that an organization adheres to international standards and best practices. This can enhance trust with customers, partners, and stakeholders. 

Market Advantage: Certification can differentiate an organization from competitors, providing a competitive edge by showcasing commitment to quality, safety, or other key areas. 

Improved Operational Efficiency: The process of certification often involves a thorough review of organizational processes, leading to the identification of inefficiencies and areas for improvement. 

Regulatory Compliance: Certification helps ensure compliance with relevant laws and regulations, reducing the risk of legal issues and fines. 

Customer Satisfaction: Adherence to standards often leads to improved product or service quality, which can increase customer satisfaction and loyalty. 

Risk Management: Certification helps identify and manage risks, ensuring that the organization is better prepared to handle potential issues. 

Employee Engagement: Achieving certification can boost employee morale by providing clear standards and goals, fostering a sense of pride and accomplishment.

It is important also to keep in mind that at the outset, very often, certain factors are not anticipated or overlooked by entities planning for Certification, such as: (i) Cost Involved for Implementation: The certification process involve costs for the certification body, training, and potential system changes. When consciously taken into consideration during the planning stage, this can be managed. (ii) Time-Consuming and Rigorous: Achieving and maintaining certification requires time and effort, including preparing documentation, undergoing audits, and implementing changes. This can be demanding on resources. (iii) Compliance Commitment: Maintaining certification involves ongoing compliance with the standard’s requirements, which can add to the administrative burden and require continuous monitoring and updating of practices. (iv) False Sense of Security: Certification does not guarantee perfection or prevent all potential issues. Organizations may become complacent, assuming certification alone ensures quality or safety. (v) Potential for Misalignment: In some cases, the focus on meeting certification requirements might lead to processes or practices that do not fully align with the organization’s unique needs or strategic goals. (vi) Market Saturation: As more organizations become certified, the competitive advantage of certification can diminish, making it less of a differentiator.

Overall, while certification by accreditation bodies offers many benefits, including enhanced credibility, operational efficiency, and customer satisfaction, entities must recognise the related aspects of associated costs, administrative responsibilities, and change in risk patterns, etc. Balancing these factors is key to maximizing the value of certification.

The International Standard for Quality Management System is ISO 9001, and the current applicable version is 2015. The standard specifies what need to be achieved by any entity which intends to demonstrate its ability to consistently deliver products and services satisfying the expectations and wherever possible, surpassing expectations of customers and stakeholders. It also specifically emphasises the need for such entities to demonstrate compliance of regulatory and statutory obligations. The standard further requires that such entities demonstrate their commitment towards customer service, customer satisfaction and continuous improvement.

The Quality Management System standard is based on the Principles of Quality Management – which are: (i) Customer Focus, (ii) Leadership, (iii) Engagement of People, (iv) Process Approach, (v) Improvement, (vi) Evidence-based Decision-making, (vii) Risk-based Thinking, and (viii) Relationship Management.

The basic Structure of the requirements may be summarized as: (a) Understanding the organization, its context, commitments, the scope of Quality Management, etc., (b) Leadership roles, responsibilities, commitments, and objectives, (c) Planning for necessary actions to deal with risks and opportunities, determination of objectives, management of change, etc., (d) Enabling support by providing resources, systems, maintaining knowledge and skills, etc, (e) Performance Evaluation methods, and (f) Reviews and Internal Audits.

The Operational requirement includes controls, checks, product and service production plan, development plan, implementation of plans and enabling continuous improvement.  

Key Benefits of any robust QMS are: (i) Enhanced Customer Satisfaction: Consistently delivering high-quality products or services meets or exceeds customer expectations, leading to increased satisfaction and loyalty; (ii) Improved Efficiency: Streamlined processes and continuous improvement reduce waste, errors, and rework, boosting overall operational efficiency; (iii) Increased Market Competitiveness: High-quality standards can differentiate your business from competitors, helping to capture a larger market share; (iv) Regulatory Compliance: Adhering to quality standards helps ensure compliance with industry regulations and standards, avoiding potential legal issues; (v) Better Financial Performance: Reduced costs associated with defects, rework, and customer complaints can lead to improved profitability and financial performance; (vi) Enhanced Employee Morale: Clear quality standards and goals provide employees with a sense of purpose and direction, which can improve job satisfaction and productivity, and so on.

Risk is inherent in everything, and it has been so ever since there has been creation.

However, the modern Risk Management theories and practices probably have their roots in the formulation of the COSO Guidelines published in 1985 by the joint initiative of AAA, AICPA, FEI, IMA and IIA. The first standard that was documented and published for Risk Management is the AS 4360 – an Australian standard in 1995 – which was subsequently discontinued with when ISO published the international standard. Through the years the inclusion of Risk Management in modern day management systems has been gaining more and more importance. The International Risk Management Framework and Guideline - ISO 31000 was published in 2009, and the current version is the one upgraded in 2018.

The purpose of Risk Management is the creation of value and protection from loss of value. It helps in improving performance, encourages innovation, and supports the achievement of objectives and goals. Principles are the foundation which enable intentions and purpose of any management system to succeed in meeting its objectives. Similarly in risk management, sound principles act as an effective foundation. Some of these principles - which are unanimously accepted - are: (i) Integration with other practices and procedures in a Management System, (ii) Structured, well-planned and comprehensive – which maintains consistency and reliability, (iii) Adaptability which ensures that the framework can be customized as per the complexity and context of a management system, (iv) Inclusive of a number of key components such as stakeholder involvement, right expertise, right knowledge, etc. (v) Dynamic approach ensures promptness in identification, evaluation, response to changing risk patterns to make the practices effective, (vi) Information Availability of highest quality and quantity , (vii) Human and Cultural Factors which influence and are integral to the risk culture, and (viii) Continual Improvement.  

Risk Management System comprises of a set of systematically and logically arranged pieces of action – that is, a Framework - some of the components of which are planning, assignment of roles and responsibilities, assessment of risk, evaluation, treatment and response, reporting, reviews, corrective actions, and so on.

Key benefits of a good Risk Management System may be considered as: (i) Reduced Risk Exposure: Identifying and assessing potential risks allows organizations to implement strategies to mitigate or manage these risks, reducing their impact; (ii) Improved Decision-Making: A structured approach to risk management provides valuable insights and data, supporting more informed and strategic decision-making; (iii) Increased Resilience: Effective risk management enhances the organization’s ability to respond to and recover from adverse events, ensuring business continuity; (iv) Regulatory Compliance: Helps meet legal and regulatory requirements related to risk management, avoiding fines and legal complications; (v) Enhanced Reputation: Demonstrating a proactive approach to risk management builds trust with stakeholders, including customers, investors, and partners; (vi) Cost Savings: By preventing or minimizing the impact of risks, organizations can save costs associated with emergencies, insurance, and legal issues, and so on.

Information Management Systems (IMS) are crucial in today’s data-driven world, ensuring that organizations can effectively manage, store, and retrieve information. To develop a robust IMS, it’s essential to adhere to international standards, including ISO 27001 for Information Security Management and ISO 9001 for Quality Management. These standards provide a framework for managing and securing information assets, ensuring that they are accurate, accessible, and protected against unauthorized access.

Key elements of an effective IMS include data governance, which sets the rules and procedures for data management; data quality management, ensuring that information is accurate and consistent; and data lifecycle management, which oversees data from creation to disposal. The principles of an IMS revolve around confidentiality, integrity, and availability of information, ensuring that data is secure, reliable, and accessible when needed.

Best practices in IMS involve establishing clear data ownership and accountability, implementing strong data security measures, and maintaining regular audits to ensure compliance with relevant standards. It’s also important to invest in training for employees to handle information appropriately and to stay updated on the latest threats and technological advancements.

A few benefits that we derive from a good Information Management System are: (i) Enhanced Decision-Making: Access to accurate and timely information supports better business decisions; (ii) Increased Efficiency: Streamlined data management processes reduce redundancy and improve operational efficiency; (iii) Improved Compliance: Ensures adherence to data protection regulations and standards; (iv) Risk Mitigation: Reduces the risk of data breaches and loss through robust security measures; (v) Better Customer Service: Ensures reliable access to customer data, improving response times and service quality, and so on.

Following a logical sequence of steps help in planning and implementation of an effective IMS, such as: (i) Assessment: Conduct a thorough analysis of your organization’s current information management practices and identify gaps; (ii) Planning: Define the scope, objectives, and resources required. Develop a detailed IMS policy aligned with business goals and relevant standards; (iii) Design and Development: Create a structure for data management, including data classification, storage, access controls, and security protocols; (iv) Implementation: Deploy the system, ensuring that all stakeholders are trained, and the necessary infrastructure is in place; (v) Monitoring and Review: Regularly monitor the system’s performance, conduct audits, and update processes as needed to adapt to changing requirements, and so on.

A good approach while setting up an IMS is to adhere to best practices so that entities benefit from a system which is effective, secure, and capable of supporting their long-term objectives.

A Business Continuity Management System (BCMS) is essential for organizations to ensure resilience and continuity in the face of disruptions. Adhering to standards like ISO 22301, which provides a framework for establishing, implementing, maintaining, and improving a BCMS, is crucial. This standard outline the necessary policies and processes to ensure that an organization can continue operations during and after a disruptive event.

The key elements of an effective BCMS include risk assessment, business impact analysis, and recovery strategies. Risk assessment involves identifying potential threats and vulnerabilities that could impact operations. Business impact analysis (BIA) assesses the effects of disruptions on critical business functions, helping prioritize resources and recovery efforts. Recovery strategies define the actions and resources needed to restore operations, including backup systems, alternative work locations, and communication plans.

The principles of BCMS revolve around proactive planning, flexibility, and continuous improvement. A successful BCMS ensures that an organization is not only prepared for disruptions but can also adapt and recover quickly, minimizing downtime and financial loss.

Best practices for BCMS include regular testing and exercising of continuity plans, involving all key stakeholders in the planning process, and maintaining up-to-date documentation. It’s also important to foster a culture of resilience within the organization, where employees are aware of their roles and responsibilities during a crisis.

To plan and implement a robust and effective BCMS – capable of managing operations and function in case of interruptions or unforeseen events, the steps followed are : (i) Initiation: Secure top management commitment and define the scope of the BCMS; (ii) Risk Assessment and BIA: Identify risks, assess their impact, and prioritize critical functions; (iii) Strategy Development: Develop and document recovery strategies and plans; (iv) Implementation: Deploy the BCMS, ensuring all employees are trained and aware of the continuity plans: (v) Testing and Review: Regularly test the plans, conduct drills, and review the system to make necessary improvements.

BCMS is a very crucial element of good management practices, and several benefits that are derived include: (i) Minimized Downtime: Ensures quick recovery from disruptions, reducing downtime and associated costs; (ii) Enhanced Organizational Resilience: Prepares the organization to handle unexpected events effectively; (iii) Improved Stakeholder Confidence: Demonstrates a commitment to maintaining operations, boosting trust among customers, partners, and investors; (iv) Regulatory Compliance: Helps meet legal and regulatory requirements related to business continuity; (v) Competitive Advantage: Being able to continue operations during a crisis can differentiate your organization from competitors, and so on.

An Anti-Bribery Management System (ABMS) is critical for organizations committed to ethical practices and legal compliance. The ISO 37001 standard is the key international framework for ABMS, providing guidelines for establishing, implementing, maintaining, and improving an anti-bribery management system. This standard helps organizations prevent, detect, and respond to bribery, ensuring compliance with anti-bribery laws and promoting a culture of integrity. 

The framework is effectively applied to cover a full range of similar risk management including but not limited to Fraud Management, Corruption Prevention, Statutory Compliance, etc.

Key elements of the Framework include risk assessment, anti-bribery and similar policies, and due diligence. The risk assessment identifies areas where the organization is most vulnerable to fraud, bribery or corruption. The policy or policies outlines the organization’s stance on bribery, corruption, fraud, etc. and the procedures for managing related risks. Due diligence involves vetting business partners, suppliers, and other third parties to ensure they adhere to anti-bribery standards.

The principles of ABMS or similar systems revolve around accountability, transparency, and continuous improvement. Organizations must establish clear responsibilities for anti-bribery measures, ensure transparency in business transactions, and continuously monitor and improve their anti-bribery practices.

Best practices for Fraud Prevention or ABMS include providing regular training for employees, establishing a confidential reporting mechanism for suspected bribery, and conducting regular audits to ensure compliance. It is also important to engage with stakeholders and promote an ethical culture across the organization.

An effective and robust Fraud Prevention and ABMS - that safeguards an entity against fraud, bribery, corruption, and similar threats and fosters a culture of integrity and compliance – can be planned and established by considering: (i) Commitment: Secure leadership commitment and define the scope of the ABMS; (ii) Risk Assessment: Identify bribery risks and assess their potential impact on the organization; (iii) Policy Development: Develop and communicate the anti-fraud, anti-bribery, etc. policy and procedures; (iv) Implementation: Deploy the management system, including training, due diligence processes, and a reporting mechanism; (v) Monitoring and Improvement: Regularly monitor the system, conduct audits, and update the management system as necessary to address emerging risks and improve effectiveness, and so on.

Crucial benefits that are enjoyed by entities as a result of robust Fraud Prevention and AMBS may be considered as: (i) Reputation Protection: Safeguards the organization’s reputation by preventing bribery-related scandals; (ii) Legal Compliance: Helps avoid fines, legal actions, and sanctions related to bribery offenses; (iii) Improved Business Relationships: Builds trust with customers, partners, and investors by demonstrating ethical practices; (iv) Operational Integrity: Ensures that business processes are conducted with transparency and fairness; (v) Employee Awareness: Promotes a culture of integrity, reducing the risk of unethical behavior within the organization, and similar.

A Compliance Management System (CMS) is vital for organizations to ensure adherence to legal, regulatory, and ethical standards. The ISO 37301 standard provides a comprehensive framework for establishing, implementing, maintaining, and improving a CMS, helping organizations manage compliance obligations effectively and mitigate risks.

Key elements of a CMS include compliance risk assessment, compliance policies and procedures, and monitoring and reporting mechanisms. The risk assessment identifies areas where the organization is most at risk of non-compliance. Compliance policies and procedures provide clear guidelines for employees to follow, ensuring that the organization meets its legal and regulatory obligations. Monitoring and reporting mechanisms allow the organization to track compliance performance and identify areas for improvement.

The principles of a CMS focus on accountability, transparency, and a culture of compliance. Organizations must establish clear roles and responsibilities for compliance, ensure transparency in compliance-related activities, and promote a culture where compliance is seen as a shared responsibility.

Best practices for CMS include regular training and awareness programs for employees, establishing a robust internal audit system, and maintaining up-to-date documentation of compliance obligations and procedures. Engaging with external stakeholders and staying informed about changes in laws and regulations are also critical components of an effective CMS.

An efficient CMS can be planned and implemented by consideration of the focus areas such as: (i) Commitment and Scope: Secure top management commitment and define the scope of the CMS; (ii) Risk Assessment: Identify and assess compliance risks, prioritizing those with the highest impact; (iii) Policy and Procedure Development: Develop and document compliance policies and procedures that align with legal and regulatory requirements; (iv) Implementation: Roll out the CMS, including employee training, communication, and the establishment of monitoring systems; (v) Monitoring and Review: Continuously monitor compliance performance, conduct audits, and review and update the CMS to address emerging risks and changes in the regulatory environment, and similar aspects.

Tremendous benefits are enjoyed by entities which have well-planned and robust CMS such as: (i) Reduced Legal Risks: Ensures compliance with laws and regulations, minimizing the risk of legal penalties; (ii) Improved Operational Efficiency: Streamlines compliance processes, reducing the time and resources required to manage compliance; (iii) Enhanced Corporate Governance: Strengthens governance by ensuring adherence to ethical standards and legal requirements; (iv) Increased Stakeholder Trust: Demonstrates a commitment to ethical practices, improving relationships with stakeholders; (v) Proactive Risk Management: Allows for the early identification and mitigation of compliance risks, preventing potential issues before they escalate.