Risk appetite is a concept that helps guide
organizational risk management activities by allowing officials to establish a
baseline level of risk an organization is prepared to accept before taking an
action, as well as evaluate the likelihood and impact of certain threats.
The risk appetite should also be consistent with the culture
of the company and with the capacity of the organization to manage risks
inherent in its business activities.
It is important for the company:
the value of a risk appetite statement is more than just as a set of
benchmarks, it is also a means of communication. By bringing together
the performance of the corporation and its commercial operations in a
single framework, it triggers discussion about the key financial drivers
and associated risks.
Refrence:
http://searchcompliance.techtarget.com/definition/risk-appetite
http://www.ey.com/GL/en/Services/Advisory/Risk-appetite--the-strategic-balancing-act
http://www.oliverwyman.com/insights/publications/2012/nov/defining-your-risk-appetite.html#.VWqUb0aGf5w
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