ISO 27001 Clause 4.1 Understanding The Organisation And Its Context

ISO 27001 Understanding The Organisation And Its Context

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

In this ultimate certification guide to ISO 27001 Understanding The Organisation And Its Context you will learn

• What ISO 27001 Clause 4.1 is
• How to implement it
• What internal and external issues are
• How to identify them
• Examples of internal and external issues

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 are internal and external 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.

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).

ISO 27001 Clause 4.1 Purpose

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.

ISO 27001 Clause 4.1 Definition

The ISO 27001 standard defines ISO 27001 Clause 4.1 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.’

ISO 27001 Clause 4.1 Ownership

The Information Security Officer is responsible for collaborating closely with the domain experts to identify and manage internal and external issues.

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.

ISO 27001:2022 Amendment 1: Climate action changes 

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.

How to implement ISO 27001 Clause 4.1

When implementing ISO 27001, to comply with ISO 27001 Clause 4.1 Understanding The Organisation And Its Context, you will need to identify and document the internal and external issues that could potentially affect your information security management system and document them in a Context of Organisation document.

ISO 27001 Clause 4.1 Implementation Checklist

1. Conduct a Brainstorm Session

The best way to identify internal and external issues is by doing a brainstorming session with relevant stakeholders. Identifying internal and external issues can be challenging.

• Create teams with members from different departments to encourage knowledge sharing and collaboration.
• With key interested parties from across the business and organisational units perform a brainstorming session to record the potential issues that you may face.
• Consider using the example internal issues and external issues later in this article as your starting point.

2. Address Compliance and Security Requirements

Legal and regulatory compliance is the biggest potential external issue that you will face. Maintaining compliance while adapting to constantly evolving regulations presents a significant challenge. In our previous guide ISO 27001 Annex A 5.31 Legal, statutory, regulatory and contractual requirements

• Incorporate compliance requirements directly into the Information Security Management System (ISMS) framework.
• Regularly train security teams on the latest regulatory requirements and best practices for maintaining compliance in test environments.
• Use an ISO 27001 legal register template to record all relevant laws.

3. Align with the Organisation

Internal and external issues are directed at the management system but in the context of the organisation so you should understand and align with the organisations culture and goals.

• Read and understand the organisation mission and goals and ensure these are referenced when identifying issues.
• Incorporate the business goals into the information security management system and align them with the goals of the ISMS.
• Create a documented overview of the organisation utilising the ISO 27001 Organisation Overview Template.

4. Assess the organisation’s infrastructure

Internal issues can be as a result of both human resources and technical infrastructure and therefore these should be assessed.

• Work with HR to create and document organisation charts. Using the roles and responsibilities aligned with ISO 27001 Clause 5.3 Organisational Roles, Responsibilities and Authorities identify gaps and internal resource issues.
• Understand the roles that are required for the information security management system as referenced in ISO 27001 Clause 5.3 (Organisational Roles, Responsibilities and Authorities) and document them in the ISO 27001 Information Security Roles and Responsibilities Template identifying gaps and internal resource issues.
• Working with the technical teams and domain experts create accurate technical documentation including server and network diagrams and identify any internal technological issues.

5. Follow the risk management process

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

• Conduct thorough risk assessments tailored to identifying ISO 27001 internal Issues and ISO 27001 external issues to the ISMS. This process should adhere to ISO 27001 Clause 6.1 Planning, focusing on identifying and addressing potential vulnerabilities and threats.
• 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.

6. Document the internal and external issues

As the ISO 27001 relies heavily on documentation, you will document the internal and external issues.

• Record the issues using the ISO 27001 Context of Organisation template.

ISO 27001 Clause 4.1 Audit Checklist

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.

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

Watch the Tutorial

For a visual guide on how to implement ISO 27001 Clause 4.1, I suggest watching the YouTube tutorial titled ‘How to implement ISO 27001 Clause 4.1 Understanding The Organisation And Its Context‘

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.

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). Furthermore, 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.

How to identify ISO 27001 internal issues

Informal approach

“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).

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 internal 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 approach

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

General Considerations

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.

Example Internal Issues

ISO 27001 Clause 4.1 internal issues examples include

Internal Issue	Example Internal Issue
People	Internally there are no resources trained or experienced in the delivery of ISO 27001.
Time	Key departments and key individuals need to invest significant time in implementing and managing the information security management system and its supporting controls.
Organisational Structure	The structure of the organisation currently does not fully support the information security management implementation and on-going management. Changes will be required.
Technologies	The company uses off the self, standard applications under license.
Availability of reliable, qualified and competent work force	There is strong competition in the market for resources for x technology.
Company Objectives	The company objectives are aligned with the information security objectives.

The following are 10 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.

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.

How to document ISO 27001 internal issues

ISO 27001 requires organisations to document internal issues within the ISO 27001 Context of the Organisation Template. This section helps establish the foundation for the Information Security Management System (ISMS) by understanding the internal and external factors that can influence its success.

Recommended structure

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

Internal Issue Name	The Internal Issue
[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

Internal Issue Name	The Internal Issue
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 considerations

• Use clear and concise language to describe each internal 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 internal issues to reflect changes within the organisation and the evolving threat landscape.

When to update ISO 27001 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:  

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.

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.

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.

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.

How to identify ISO 27001 external issues

Informal Approach

“External issue” is essentially 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).

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 external 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, prioritising the most significant and impactful issues based on their likelihood and potential consequences.

Formal Approach

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

• Political: External politics
• Economic: External financial pressures.
• Social: Customer expectations and requirements and external communication challenges.
• Technological: New and emerging technology.
• Legal: External legal and regulatory compliance issues, data privacy concerns, and intellectual property rights.
• Environmental: External environmental factors such as climate or office and facility location specific concerns.

General Considerations

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.

Example External Issues

ISO 27001 Clause 4.1 external issues examples include

External Issue	Example External Issue
Economic Climate	[Consider the current economic climate and its impact on the business and the information security management system.]
Technology Advances	[Consider the impact of technology changes on the business and information security management system.]
Competition	[Consider the place within the marketplace and the stage and maturity of the business. Consider comparing the information security management system and approach to that of the competition.]
Legislation changes	[Consider the impacts of Data Privacy laws, impacts of topics such as Brexit.]
Relationships with external stakeholders	[Consider the relationship with external stakeholders positive / negative describing the reporting and structure.]

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.

How to document ISO 27001 external issues

ISO 27001 requires organisations to document external issues within the ISO 27001 Context of the Organisation Template. This section helps establish the foundation for the Information Security Management System (ISMS) by understanding the external and external factors that can influence its success.

Recommended Structure

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

External Issue Name	The External Issue
[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:

External Issue Name	The External Issue
Stakeholder Expectations	The expectations of customers, suppliers, and other stakeholders regarding data privacy and security.
Cybersecurity Threats	The evolving threat landscape, including new malware, ransomware attacks, and social engineering techniques.
Economic Conditions	Rapid changes in technology, such as the rise of cloud computing, artificial intelligence, and the Internet of Things.

Key Considerations

• Use clear and concise language to describe each external 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 external issues to reflect changes within the organisation and the evolving threat landscape.

When to update ISO 27001 external issues

ISO 27001 external 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:  

Regular Intervals

Conduct a thorough review of external issues at least once a year. This allows you to assess changes within the organisation, such as:

• Political changes: Changes in governments.
• 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.

Trigger Events

• Following any external security incident, conduct a thorough review of external issues to identify any risk factors and implement necessary corrective actions.
• After external audits, review and update external issues based on the findings and recommendations of the audit.
• Whenever risk assessments are conducted or updated, review and update the list of external issues to reflect any new or changed risks.

Best Practices

• Maintain a record of all changes made to the list of external 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 external issues.
• Involve key personnel from across the organisation in the review and update process to ensure a comprehensive and accurate assessment of external issues.

How to pass an audit of ISO 27001 Clause 4.1

To successfully pass an audit of ISO 27001 Clause 4.1 you must

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

What the auditor will check

The auditor is going to check a number of areas for compliance with Clause 4.1.

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.

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.

ISO 27001 Clause 4.1 Common Mistakes

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

ISO 27001 Clause 4.1 FAQ