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.
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Famous quotes containing the words measuring, risk and/or appetite:
“By measuring individual human worth, the novelist reveals the full enormity of the State’s crime when it sets out to crush that individuality.”
—Ian McEwan (b. 1938)
“I’m a very smart guy. I haven’t a feeling or a scruple in the world. All I have the itch for is money. I am so money greedy that for twenty-five bucks a day and expenses, mostly gasoline and whisky, I do my thinking myself, what there is of it; I risk my whole future, the hatred of the cops ... I dodge bullets and eat saps, and say thank you very much, if you have any more trouble, I hope you’ll think of me, I’ll just leave one of my cards in case anything comes up.”
—Raymond Chandler (1888–1959)
“Parenthood is not an object of appetite or even desire. It is an object of will. There is no appetite for parenthood; there is only a purpose or intention of parenthood.”
—R.G. (Robin George)