To
determine risk appetite, management, with board review and concurrence, should
take three steps:
1. Develop risk appetite
2.
Communicate risk appetite
3.
Monitor and update risk appetite
These
three steps are discussed briefly below, and in detail in the body of this
paper.
Risk
appetite is the amount of risk, on a broad level; an organization is willing to
accept in pursuit of value each organization pursues various objectives to add value
and should broadly understand the risk it is willing to undertake in doing so.
................................By Faith Gabriella.
