It’s clear from commentary and my blog’s web traffic data that risk appetite is considered to be the most challenging and controversial parts of ERM. To learn more about these differing perspectives, I invite you to check out this article that includes commentary from various thought leaders.

We are always trying to better understand the concepts of risk appetite and tolerance and how they can be used to make better informed decisions and even take risks in pursuit of value.

A recent interview on risk appetite with Hans Læssøe dives headfirst into this topic.

How did the concepts of risk appetite, tolerance and capacity get to be so confusing? Well, it doesn’t help that the two leading risk management standards, ISO 31000 and COSO, each define risk appetite and tolerance in opposite ways, which makes the application of these concepts even more nebulous.

So how can we understand and harness this tool effectively to build a competitive advantage?

Watch the interview below to learn more.

For a recap of the basics, I invite you to check out my previous article 7 Questions for Understanding the Fundamentals of Risk Appetite. Also, Hans’ book Prepare to Dare (pgs. 83-104) outlines the topic of risk appetite. The interview includes additional commentary that can be helpful in applying this concept in your organization.

Below is a list of major points we discuss for easy reference, Read more:

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