The Ultimate Guide to ISO 27001 Clause 4.1: Understanding the Context of the Organisation

ISO 27001 Understanding The Organisation and Its Context 

ISO 27001 Understanding The Organisation and Its Context is the requirement to identify and manage the internal and external issues that can affect the information security management system (ISMS) and prevent it from achieving its intended outcomes.

In ISO 27001 this is known as ISO27001:2022 Clause 4.1 Understanding The Organisation And Its Context. It is one of the mandatory ISO 27001 clauses.

Internal issues and external issues are just another way of saying risks.

Internal and external issues are risks to the information security management system and they should be identified and managed.

So the clause is asking you to consider and record what internal and external risks there are to your information security management system (ISMS). What could stop your information security management system from being able to achieve its outcomes?

Key Takeaways

• Internal and external issues are risks to the information security management system.
• You identify them by doing a brainstorming session
• You manage them via risk management

What is ISO 27001 Clause 4.1?

ISO 27001 Clause 4.1 Understanding The Organisation And Its Context is an ISO 27001 clause that requires us to understand the internal and external issues that could impact your information security management system (ISMS).

Purpose and Definition

ISO 27001 Clause 4.1 is an Information Security Management System (ISMS) control to ensure you identify, manage and mitigate risks to the management system achieving its intended outcomes.

The ISO 27001 standard defines ISO 27001 Clause 4.1 Understanding The Organisation And Its Context as:

The organisation shall determine external issues and internal issues that are relevant to its purpose and that affect its ability to achieve the intended outcome(s) of its information security management system.
The organisation shall determine whether climate change is a relevant issue.

ISO27001:2022 Clause 4.1 Understanding The Organisation And Its Context

The standard amended the definition in February 2024. This amendment, referred to as Amendment 1: Climate action changes added climate change to ISO 27001 Clause 4.1. The standard also added the following sentence:

‘ The organisation shall determine whether climate change is a relevant issue.’

ISO27001:2022 Amendment 1

1. Determine internal issues and external issues: These are the risks that are relevant to the information security management system and the risk to its ability to achieve is intended outcomes. This is usually done by carrying out a brainstorming session with key stakeholders.
2. Manage those internal and external issues: You will manage those identified risk via the ISO 27001 risk management process.
3. Determine if climate change is a relevant issue: Whilst not immediately obvious an information security management system can have an impact on climate change, for example by requiring more resources, more computing power or consuming more CO2.

What is ISO 27001 Amendment 1: Climate action changes?

In February 2024 the standard was amended to include climate change. The following sentence was added to the clause

The organisation shall determine whether climate change is a relevant issue.

For more information on the changes in ISO 27001:2022 Amendment 1, I recommend reading the article ISO27001:2022 Amendment 1: – Absolutely Everything You Need to Know.≤

This short video explains everything you need to know about the ISO 27001 Amendment 1.

Understanding Internal and External Issues

What are ISO 27001 internal issues?

ISO 27001 Internal Issues are threats that could hinder the effective functioning of your information security management system (ISMS). In other words, consider them as risks that could prevent the ISMS from achieving its desired outcomes.

ISO 27001 Internal Issues are inherent risks originating within an organisation that can hinder the effective functioning of its Information Security Management System (ISMS). These issues originate within your organisation and, to a large extent, are within your control. These internal risks can impede the ISMS from achieving its objectives, particularly in safeguarding the confidentiality, integrity, and availability of information assets.

Internal issues is defined as – organisational risks to the Information Security Management System (ISMS) achieving its interned outcomes.

In this video I explain what ISO 27001 internal issues are with examples.

10 real world examples of ISO 27001 Internal Issues

The following are 10 real world examples of ISO 27001 Internal Issues:

1. Lack of management commitment: This can hinder the successful implementation and maintenance of the ISMS, as employees may not perceive information security as a critical organisational objective.
2. Inadequate resource allocation: This can lead to gaps in security coverage, delayed responses to incidents, and an inability to implement necessary security measures.  
3. Lack of employee awareness and training: This can increase the risk of data breaches, system disruptions, and reputational damage.
4. Poor communication and coordination: This can create silos within the organisation, hindering the collective effort to maintain information security.
5. Resistance to change: This can lead to non-compliance with security measures, hindering the effectiveness of the ISMS6.
6. Lack of Regular Reviews and Updates: This can lead to outdated security controls, increased vulnerability to new threats, and non-compliance with evolving standards and regulations.
7. Inadequate access control management: This can lead to data breaches, system disruptions, and loss of confidentiality, integrity, and availability of information assets.
8. Insufficient incident response planning: This can exacerbate the impact of security incidents, increasing the risk of data loss, system downtime, and reputational damage.
9. Inadequate physical and environmental security: This can lead to data breaches, system disruptions, and loss of critical infrastructure.
10. Lack of Business Continuity and Disaster Recovery Planning: This can lead to significant financial losses, reputational damage, and disruption to business operations.

By identifying and addressing these internal issues, organisations can significantly improve the effectiveness of their ISMS and enhance their overall information security posture.

What are ISO 27001 external issues?

External Issues are inherent risks originating outside an organisation that can hinder the effective functioning of its Information Security Management System (ISMS). These external risks, primarily outside the organisation’s control, can impede the ISMS from achieving its objectives, particularly in safeguarding the confidentiality, integrity, and availability of information assets.

External issues is defined as – external risks to the Information Security Management System (ISMS) achieving its interned outcomes.

In this video I explain what ISO 27001 external issues are with examples.

10 real world examples of ISO 27001 External Issues

The following are 10 real world examples of ISO 27001 External Issues:

1. Legal and Regulatory Requirements: Changes in data privacy laws (e.g., GDPR, CCPA), industry-specific regulations (e.g., HIPAA, PCI DSS), and cybersecurity frameworks (e.g., NIST Cybersecurity Framework). Non-compliance can lead to severe financial penalties, reputational damage, and loss of customer trust.
2. Competitive Landscape: Actions of competitors, such as new product offerings, market share shifts, and cyberattacks targeting rivals. This can indirectly affect an organisation’s information security posture by increasing pressure to innovate and adapt, potentially leading to security vulnerabilities.
3. Technological Advancements: Rapid changes in technology, such as the rise of cloud computing, artificial intelligence, and the Internet of Things. This creates new security challenges and opportunities, requiring organisations to constantly update their security controls and adapt to evolving threats.
4. Economic Conditions: Economic downturns or recessions can impact an organisation’s budget, potentially leading to reduced spending on information security measures. This can weaken the organisation’s security posture, making it more vulnerable to cyberattacks.
5. Social and Cultural Factors: Changing societal norms and expectations regarding data privacy and security, as well as cultural differences between countries. This can influence an organisation’s approach to information security and its reputation among stakeholders.
6. Political Stability: Political instability, such as wars, conflicts, or changes in government. This can disrupt business operations and increase the risk of cyberattacks, particularly those targeting critical infrastructure.
7. Natural Disasters: Natural disasters, such as earthquakes, floods, and hurricanes can damage physical infrastructure and disrupt business operations, potentially impacting the availability and integrity of information assets.
8. Geopolitical Events: Global events, such as pandemics, trade wars, and geopolitical tensions can create uncertainty and disrupt supply chains, potentially affecting an organisation’s ability to maintain its information security controls.
9. Cybersecurity Threats: The evolving threat landscape, including new malware, ransomware attacks, and social engineering techniques. This requires organisations to constantly adapt their security measures to stay ahead of cybercriminals.
10. Stakeholder Expectations: The expectations of customers, suppliers, and other stakeholders regarding data privacy and security can influence an organisation’s information security policies and practices, as well as its reputation and brand image.

ISO 27001 Clause 4.1 Explained: A Complete Guide

In the video ISO 27001 Clause 4.1 Understanding The Organisation And Its Context Explained I show you how to implement it and how to pass the audit.

How to Implement Clause 4.1 in 4 Simple Steps

Step 1: Identify Your Issues

An internal issue is essentially synonymous with internal risk in the context of ISO 27001. Both refer to potential problems or threats originating within the organisation that could negatively impact the effectiveness of your Information Security Management System (ISMS).

External issue is synonymous with external risk in the context of ISO 27001. Both refer to potential problems or threats originating outside the organisation that could negatively impact the effectiveness of your Information Security Management System (ISMS).

In my experience, there are two approaches to identifying internal and external issues, the informal approach and the formal approach. Let’s take a look at each in turn:

Informal Methods for Identifying Internal and External Issues

A key starting point is a collaborative brainstorming session. Involve a diverse group of stakeholders, including representatives from various departments, IT, HR, legal, and senior management. An optional facilitator can guide the discussion and ensure all perspectives are considered.

Begin by capturing all potential issues. This initial brainstorming phase should be inclusive, considering all potential concerns raised by participants.

Refine the list through discussion and analysis. Gradually narrow down the list, prioritizing the most significant and impactful issues based on their likelihood and potential consequences.

Categorise issues by department where possible. This can help identify departmental-specific vulnerabilities and facilitate targeted risk mitigation strategies.

Formal Methods for Identifying Internal and External Issues

For a more structured approach, consider a PESTLE analysis. This framework can be adapted to identify internal issues by focusing on internal factors:

• Political: Internal politics, external politics, power struggles, and resistance to change within the organisation.
• Economic: Budget constraints, resource limitations, and internal financial pressures, external financial pressures.
• Social: Employee morale, cultural norms, internal communication challenges, customer expectations and requirements and external communication challenges.
• Technological: Obsolete technology, lack of technical expertise, inadequate IT infrastructure, new and emerging technology.
• Legal: Internal legal and regulatory compliance issues, data privacy concerns, intellectual property rights, external legal and regulatory compliance issues, and data privacy concerns.
• Environmental: Internal environmental factors such as office layout, physical security measures, and disaster recovery planning. External environmental factors such as climate or office and facility location specific concern

Things to consider when identifying internal issues

When considering ISO 27001 internal issues and what could impact information security, the following can be a great guide:

• The organisation’s culture.
• Organisational governance.
• Organisational structure.
• People’s roles and accountabilities.
• Policies.
• Company objectives and the strategies that are in place to achieve them.
• Organisational capabilities in terms of resources and knowledge.
• The relationships, perceptions and values of internal interested parties.
• Information systems.
• Information flows and decision-making processes.
• Standards, guidelines and models adopted by the organisation.
• Contractual relationships.

Things to consider when identifying external issues

When considering external issues and what could impact information security, the following can be a great guide:

• The social and cultural, political, legal, regulatory, financial, technological, economic, natural and competitive environment, whether international, national, regional or local.
• Key drivers and trends having impact on the objectives of the organisation; and
• Relationships with perceptions and values of external interested parties.

Step 2: Document Your Context

ISO 27001 requires organisations to document internal and external issues within the ISO 27001 Context of the Organisation Template. This helps establish the foundation for the Information Security Management System (ISMS) by understanding the internal and external factors that can influence its success. In this short video I give you some guidance on how write and document your internal and external issues.

Recommended document structure

A clear and concise way to document internal issues is through a table with two columns:

The Issue Name	The Issue Description
[Issue 1 Name]	[Detailed description of the issue and its potential impact on the ISMS]
[Issue 2 Name]	[Detailed description of the issue and its potential impact on the ISMS]
[Issue 3 Name]	[Detailed description of the issue and its potential impact on the ISMS]

Example document structure

Here is a real world example of that document structure in practice:

The Issue Name	The Issue Description
Lack of Management Commitment	Top management may not consistently prioritise information security, leading to insufficient resource allocation, lack of clear direction, and inconsistent enforcement of policies. This can hinder the successful implementation and maintenance of the ISMS.
Inadequate Employee Awareness	Employees may not be adequately trained on security policies, procedures, and best practices, leading to human error, such as accidental data breaches or non-compliance with security measures. This can increase the risk of data breaches and system disruptions.
Resistance to Change	Employees may resist changes to security policies or procedures, fearing disruption to their daily work or perceiving the changes as unnecessary burdens. This can lead to non-compliance with security measures and hinder the effectiveness of the ISMS.

Key documentation considerations

• Use clear and concise language to describe each issue.
• Clearly articulate the potential impact of each issue on the ISMS and the organisation as a whole.
• Regularly review and update the list of issues to reflect changes within the organisation and the evolving threat landscape.

When to update issues

You may be wondering how often you should update the internal issues. ISO 27001 internal issues should be updated regularly to ensure the effectiveness of your Information Security Management System (ISMS). Here’s a breakdown of when updates are crucial:  

1. At regular intervals

At least annually, conduct a thorough review of internal issues. This allows you to assess changes within the organisation, such as:

• Organisational changes: Restructuring, mergers, acquisitions, or significant personnel changes.
• Technological advancements: New technologies, software updates, or changes in the threat landscape.
• Legal and regulatory changes: New laws, regulations, or industry standards impacting information security.
• Business changes: New products, services, or business processes that may introduce new security risks.

2. Based on trigger events

• Following any security incident, conduct a thorough review of internal issues to identify any contributing factors and implement necessary corrective actions.
• During internal audits, review and update internal issues based on the findings and recommendations of the audit team.
• As part of the regular management review process, discuss and update the list of internal issues to ensure they remain relevant and accurate.
• Whenever risk assessments are conducted or updated, review and update the list of internal issues to reflect any new or changed risks.

3. Best practices

• Maintain a record of all changes made to the list of internal issues, including the date of the change, the reason for the change, and the person responsible for the change.
• Ensure that all relevant stakeholders are aware of any changes to the list of internal issues.
• Involve key personnel from across the organisation in the review and update process to ensure a comprehensive and accurate assessment of internal issues.

Internal issues and external issues are just another way of saying risks.

So the clause is asking you to consider and record what internal and external risks there are to your information security management system (ISMS). What could stop your information security management system from being able to achieve its outcomes.

Step 3: Link Issues to Your ISMS Risk Management

Follow your risk assessment process and apply it to the internal and external issues that you have identified.

Internal and external issues can represents risk and ISO 27001 is a risk based management system, so you will follow the risk process to identify and mitigate risks.

Determine whether the identified issues and risks require risk management by utilising the ISO 27001 risk register template and ISO 27001 risk management process template.

Step 4: Implement ISO 27001 Amendment 1

It is quick and simple to implement ISO 27001 amendment 1 and in this short video I show you how.

ISO 27001 Clause 4.1: A Pro Tip for Implementers

When recording the ISO 27001 Internal and External Issues, the standard does not stipulate that you should only record the negative. In other words, do not go out of your way to find and report the negative.

It’s possible that you have considered internal issues or external issues and, in fact, it is not an issue for you.

By writing down the issues and then providing an explanation, either positive or negative, you are demonstrating that you considered it. If the explanation is positive, it shows that you considered it, and a clever auditor won’t raise it as a problem thinking they’ve got one over on you.

You can confidently say, “Yes, we considered it, we documented it, and for us, it is not an issue.”

If the explanation is negative, indicating that you do have an issue, then describe the issue and indicate whether or not you have raised a risk in the risk register to address it.

It is expected and considered good practice for each issue that is an issue to be included in the risk register and managed via risk management.

Based on experience and real world implementations my pro tip would be to record positive as well as negative internal and external issues. Watch the short video to see why.

ISO 27001 Context of Organisation Template

The ISO 27001 Context Of Organisation template fully meets the requirements of ISO 27001 Clause 4.1 and includes pre-written examples of common internal issues and external issues. The template can be purchase as an individual download or as part of the internationally acclaimed and award-winning ISO 27001 Toolkit.

How to audit ISO 27001 Clause 4.1

To conduct an internal audit of ISO 27001 Clause 4.1 Understanding The Organisation And Its Context use the following audit checklist which sets out what to audit and how to audit it.

1. Check the interested parties were identified

Verify that all relevant interested parties (e.g., customers, suppliers, regulators, employees) have been identified and their requirements documented.

• Review documentation (e.g., stakeholder registers, legal agreements)
• Conduct interviews with management and staff
• Examine meeting minutes

2. Check that internal and external issues were identified

Ensure that both internal (e.g., culture, resources, knowledge) and external (e.g., legal, technological, market) issues relevant to the ISMS have been considered.

• Review documentation and the context of organisation documentation
• Examine strategic plans, SWOT analyses and risk assessments
• Interview relevant personnel

3. Assess if the organisations purpose and context was considered

This does not happen in isolation of the organisation so check that there is alignment and consideration of culture and goals.

• Review the organisation’s mission statement, business plans, and interview senior management regarding the strategic alignment of the ISMS.

How to pass the ISO 27001 Clause 4.1 audit

To successfully pass an audit of ISO 27001 Clause 4.1 Understanding The Organisation And Its Context you must

• Identify ISO 27001 internal Issues
• Identify ISO 27001 external issues
• Document internal and external issues in a Context of Organisation Document

Watch this short video on what you need to implement and what will be audited for Clause 4.1.

What an auditor looks for

The auditor is going to check a number of areas for compliance with ISO 2001 Clause 4.1 Understanding The Organisation And Its Context.

Let’s take a look at the top 4 in more details.

1. That you have documented your internal and external issues

The simplest way to do this is with the fully populated ISO 27001 Context of Organisation Template. In this short vide I explain why you document your internal and external issues when implementing ISO 27001 clause 4.1.

2. That you are risk managing internal and external issues

If you identify internal issues or external issues that can impact the information security management system and you are not addressing them directly then you need to manage it via risk management.

This means as a minimum putting it on the ISO 27001 risk register and following your ISO 27001 risk management process.

Be sure to link the issue to the risk by cross referencing.

3. That you have approved the included common issues

Auditors often raise common internal issues and external issues that they have seen elsewhere. Therefore, it is good practice to list out all potential internal issues and external issues that could impact your information security management system, regardless of whether they apply to you or not.

If they do not apply to you, record them and explain why. By doing this, you can demonstrate that you have conducted a thorough review and avoid awkward questions or the auditor raising points that you have considered but placed out of scope.

Since you have recorded these issues and determined that they do not apply, you can provide evidence to support your conclusion.

4. Assess if legal and regulatory compliance was considered

Legal and regulatory compliance is the biggest driver of internal and external issues and as such assess if has been considered.

• Review the legal register
• Examine meeting minutes

Top 3 ISO 27001 Clause 4.1 Mistakes and How to Fix Them

Based on experience, the top 3 mistakes people make for ISO 27001 clause 4.1 are

1. You have no evidence that anything actually happened

You need to keep records and minutes and documented evidence.

As a result, recording internal issues and external issues that apply and those that do not shows a thorough understand of the requirement and will avoid awkward questions.

2. You did not link to risk management

Where internal issues or external issues are identified but you cannot satisfy it you should have this on the risk register and managed via risk management.

This is a point often overlooked.

It must be remember that if you identify an issue and do nothing about, or cannot evidence that you have done something about it, it will be raised as a non conformity.

3. Your document and version control is wrong

Best practice for documentation includes:

• Keeping your document version control up to date
• Making sure that version numbers match where used
• Having a review evidenced in the last 12 months
• Having documents that have no comments

How can an ISO 27001 Toolkit help with ISO 27001 Clause 4.1?

An ISO 27001 toolkit can significantly assist with ISO 27001 Clause 4.1 Understanding the organization and its context by providing pre-written templates and structured guidance. This clause requires an organization to identify and analyze internal and external issues that are relevant to its purpose and that can affect its information security management system (ISMS).

A toolkit typically provides documents and tools that streamline the process of meeting this requirement, which might otherwise be a manual and time-consuming task. Here’s how it helps:

• Templates for Context Analysis: A toolkit includes a template, sometimes called a “Context of the Organization” document, which is pre-populated with common examples of internal and external issues. This gives you a starting point and helps ensure you don’t miss key considerations. Internal issues might include a lack of competent staff, insufficient funding, or an outdated IT infrastructure. External issues could involve new legal and regulatory requirements (like GDPR), global political shifts, or changes in the economic landscape.
• Structured Methodology: The toolkit provides a structured approach, often using established frameworks like PESTLE (Political, Economic, Sociological, Technological, Legal, and Environmental) analysis for external issues and SWOT (Strengths, Weaknesses, Opportunities, and Threats) for internal issues. This structured method ensures a comprehensive analysis, which is what an auditor will be looking for.
• Links to Other Clauses: The toolkit helps you understand how the information gathered for Clause 4.1 feeds into other parts of the ISO 27001 standard. For example, the issues identified in this clause directly influence the risk assessment (Clause 6.1) and the determination of the ISMS scope (Clause 4.3). By providing a clear framework for this foundational step, the toolkit ensures a more coherent and effective ISMS.
• Documentation and Evidence: While Clause 4.1 does not strictly require a formal documented report, many organizations find it helpful to create one. A toolkit provides a ready-made template for this purpose, making it easy to document your analysis. This documented evidence is crucial for demonstrating to an auditor that you have a clear understanding of your organisation’s context, which is essential for achieving certification.

ISO 27001 Clause 4.1: Understanding the Context of the Organisation FAQ