Risk appetite and tolerance: guidance for practitioners
Risk appetite can be defined as 'the amount and type of risk that an organisation is willing to take in order to meet their strategic objectives'. Organisations will have different risk appetites depending on their sector, culture and objectives. A range of appetites exist for different risks and these may change over time.
Risk appetite and tolerance need to be high on any board's agenda and is a core consideration of an entreprise risk management approach. Our guidance provides practical direction, advice and information to support boardroom debate.
While risk appetite will always mean different things to different people, a properly communicated, appropriate risk appetite statement can actively help organisations achieve goals and support sustainability.