white paper

Developing and Refining Risk Appetite and Tolerance

May 1, 2024

Developing and implementing risk appetite and tolerance is a daunting prospect for many risk professionals, however clearly defined statements lead to more effective decision making, better resource allocation, and a greater understanding of risk/reward tradeoffs.

This report defines the process and delivers insight to guide risk appetite and risk tolerance statement development and implementation. Additionally, it explores the following five most common challenges risk professionals encounter during the process:

  1. How to gain buy-in from senior leadership.
  2. How to align risk appetite to corporate strategy and objectives.
  3. How to keep risk appetite statements current and accurate.
  4. How to keep risk appetite actionable.
  5. How to narrow the focus of a risk appetite statement.

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About RIMS

RIMS, the risk management society®, empowers risk professionals to make the world safer, more secure, and more sustainable. Through networking, professional development, certification, advocacy, and research, RIMS serves more than 200,000 risk practitioners and business leaders from over 75 countries. Founded in 1950, the Society publishes the award-winning Risk Management Magazine, RIMScast podcast series, and produces RISKWORLD®, the largest annual gathering of global risk professionals. RIMS welcomes all risk professionals to explore the online Risk Knowledge library, earn the RIMS-CRMP certification, and connect with the global risk community via the RIMS Engage online forum. Follow RIMSorg on X, Facebook, Instagram, and RIMS on LinkedIn. To support the future of the risk management profession, visit RIMS, The Foundation for Risk Management®.  To learn more or to join, visit www.RIMS.org.