Risk Appetite
The level of risk an organization is willing to accept in pursuit of its strategic objectives.
Risk appetite is a strategic decision that reflects the organization's tolerance for risk and is typically set by the board or executive management. It is a key component of the overall risk management framework and influences decisions on risk mitigation and acceptance.
The risk appetite should be aligned with the organization's mission, values, and risk management capabilities. It is often expressed in terms of acceptable financial exposure, operational disruptions, or reputational harm.
Understanding and setting the risk appetite is crucial for prioritizing risks and determining the appropriate response to them within the risk management process.
Risk compliance by city
Related Terms
Risk Tolerance
The maximum level of risk that an organization is prepared to accept in pursuit of its objectives.
Risk Assessment
A systematic process of identifying potential threats, evaluating vulnerabilities, and determining the likelihood and impact of risks to an organization's information assets and operations. Risk assessments are foundational to ISO 27001, DORA, and virtually every compliance framework.
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