Measuring Risk Appetite
Precise measurement is not always possible and risk appetite will sometimes be defined by a broad statement of approach. An organisation may have an appetite for some types of risk and be averse to others, depending on the context and the potential losses or gains.
However, often measures can be developed for different categories of risk. For example, it may aid a project to know what level of delay or financial loss it is permitted to bear. Where an organization has standard measures to define the impact and likelihood of risks, this can be used to define the maximum level of risk tolerable before action should be taken to lower it.
Read more about this topic: Risk Appetite
Famous quotes containing the words measuring, risk and/or appetite:
“... there is no way of measuring the damage to a society when a whole texture of humanity is kept from realizing its own power, when the woman architect who might have reinvented our cities sits barely literate in a semilegal sweatshop on the Texas- Mexican border, when women who should be founding colleges must work their entire lives as domestics ...”
—Adrienne Rich (b. 1929)
“The married are those who have taken the terrible risk of intimacy and, having taken it, know life without intimacy to be impossible.”
—Carolyn Heilbrun (b. 1926)
“When cafe life thrives, talk is a shared limberness of the mind that improves appetite for conversation: an adequate sentence maker is then made good, a good one excellent, an excellent one extraordinary.”
—Vivian Gornick (b. 1935)