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Formulating the risk appetite
Ask us a question‘If I want to achieve something I have to take risks.’ Everyone is aware of this law. The question is: which risks do I take? And why exactly do I take these risks? What limits do I apply in managing my risks? These are the questions that are answered when formulating your risk appetite.
Factors that influence your risk appetite
An organization’s risk appetite expresses the nature and extent of the risks that an organization is willing to take on in achieving its business objectives. The risk appetite must fit within what the organization can bear (the risk capacity) and is willing to tolerate (the risk tolerance).
The risk appetite is therefore dependent on internal norms/values, (social) return, and risk-bearing capacity, but also on supervisors (laws and regulations) and what is socially acceptable (stakeholders).
A well-considered, explicit statement about an organization’s risk appetite is necessary for managing internal, external expectations and for strategic direction.
Our approach
We support your organization in formulating a risk appetite by establishing a relationship between the objectives, the risks and the degree to which your organization is prepared to take risks. We work out this risk appetite in concrete limits and frameworks, which support employees in bringing their actions in line with the permitted degree of risk and promote a consistent approach to risk in the organization.