What is Risk Appetite?

Understanding and managing risk appetite is crucial for businesses. It's about finding the right balance between caution and daring. Factors like resources, impact of risk, and changing conditions define risk appetite. Establishing a framework and statement helps set limits and manage risks effectively, with specific statements for operational, financial, and reputational risks.
Regular updates and shared understanding maintain the right balance for growth and stability. Recognizing an organization's risk appetite is key for informed decision-making and sustainable progress.
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