The risk appetite dialogue helps to bring balance to the conversation around which risks the enterprise should take, which risks it should avoid and the parameters within which it should operate GOING forward. The risk appetite statement is decomposed into risk tolerances to address the question, “How much variability are we willing to accept as we pursue a given business objective?” For example, separate risk tolerances may be expressed differently for objectives relating to earnings variability, INTEREST rate EXPOSURE, and the ACQUISITION, development and retention of people.

The risk appetite dialogue helps to bring balance to the conversation around which risks the enterprise should take, which risks it should avoid and the parameters within which it should operate going forward. The risk appetite statement is decomposed into risk tolerances to address the question, “How much variability are we willing to accept as we pursue a given business objective?” For example, separate risk tolerances may be expressed differently for objectives relating to earnings variability, interest rate exposure, and the acquisition, development and retention of people.