1 Background

A What are the strategic objectives of your organisation?

B What are the risks you are willing to take to achieve those objectives?

C What steps have been taken to ensure clearer governance of risk management?

The Institute of Risk Management (IRM) have devised a 6-part framework to help you formulate a robust risk appetite essential to fulfil your corporate governance responsibilities even more effectively.

For further information about risk management visit theirm.org

2 Designing a risk appetite

A Have you reviewed your organisation’s capabilities in managing risks?

B Does an understanding of risk permeate your organisation and its culture?

C Are there incentives for good risk management?

D How much do you spend on risk management each year? How much should you spend, given your organisation’s appetite for risk?

3 Constructing a risk appetite

A Is there clear understanding of how your organisation engages with risks?

B Are you addressing all relevant risks or only those that can be captured in your risk management processes?

C Do you have a formalised, approved framework for responding to risks?

4 Implementing a risk appetite

A Who are the key external stakeholders and have their views on risk appetite been implemented?

B What criteria will need to be met as evidence that your organisation has managed your risk appetite effectively?

5 Governing a risk appetite

A Do you need to set up a risk committee to oversee your risk appetite framework?

B Are you satisfied with the governance of risk management data?

C Have you played an active part in the approval, measurement, and monitoring?

6 The journey is not over – final thoughts

A Does your organisation have sufficient and appropriate resources and systems?

B What difference do you think the process makes and what needs to change next time round?

Hand-in-hand in meeting your corporate governance duties, organisations are being asked to be more transparent about how much risk they’re willing to take to achieve their strategic objectives – what is their risk appetite? How much risk a business takes, the measures it takes to control it, and the amount of employees who comply with a risk management strategy will vary from organisation to organisation. There are proven benefits for both the private and public sector in having an up-to-date risk management strategy in place. Some organisations take risk more seriously than others – but it shouldn’t be ignored altogether. To help spark a board-level discussion about your organisation’s attitude towards risk, we’ve partnered with the Institute of Risk Management, the world’s leading enterprise-wide risk education institute.

6 ways to think about risk appetite