Risk appetite

Broadly the amount of risk that an organisation is willing to accept in pursuit of value, improved financial performance or of other benefits, with management responsible for setting boundaries or parameters for risk taking.

Any risk responses should be designed such that the 'net' (residual) risk after considering controls does not exceed these boundaries.

See also

• Risk management
• Risk policy
• Risk register
• Risk tolerance

Other links

Risk appetite and risk tolerance: Practical guidance, www.theirm.org