Risk Appetite Statements and Frameworks (Global)

The setting of an organisation’s risk appetite is a critical component of a robust risk management framework. By the end of this course, you will gain insights into how to develop a comprehensive Risk Appetite Framework and Risk Appetite Statement for your organisation.

 

Course overview

In this course, you’ll learn:

 

1. The uses and value of risk appetite

• Freedom to operate
• Escalation and reporting
• Decision making
• Assurance

 

2. What risk appetite is and what it means

• The concept of risk appetite
• Appetite, tolerance, capacity

 

3. Risk appetite framework

• Risk appetite and ISO 31000
• Risk appetite as part of your ERM framework
• The relationship between risk and reward

 

4. Determining risks to set appetite for

• Linking to risk taxonomy
• How granular?

 

5. Articulating risk appetite

• Qualitative, quantitative and semi quantitative
• Appetite for inherent and/or residual risk
• The various ways risk can be measured and appetite articulated
• A suggested framework for articulation
  • Qualitative
  • Quantitative – risk tolerances
  • Semi quantitative – risk matrix
• Prohibition statements

 

6. Appetite articulation and appetite evaluation zones

• Qualitative appetite zones
• Escalation zone

 

7. Setting appetite and tolerance for outcomes and risks

• Setting appetite for outcomes
• Setting appetite for risks
• Setting boundary thresholds
• Visualising risk appetite and tolerances

 

8. Using the likelihood and impact matrix

• Limitations of the risk matrix for risk appetite
• Modifications needed to reflect risk appetite

 

9. Setting risk tolerances for financial and non-financial risks

• Practically setting risk appetite
• The principles of setting risk appetite
• Setting risk appetite for financial risks
• Examples of financial risk categories and measures
• Setting risk appetite for operational risks
• Setting risk appetite for strategic risks

 

10. The risk appetite statement

• Content and Format – A blueprint RAS

 

11. Operationalising the risk appetite

• Cascading through the business
• Artefacts to use: policies, delegations etc.

 

12. Risk reporting using the risk appetite

• Purpose of risk appetite reporting
• Examples of reporting against risk appetite

 

13. Responsibilities for risk appetite

• Roles, responsibilities and ownership
• Who uses risk appetite

 

14. When risk appetite is revised

• Dynamic risk appetite
• Integration into strategic planning
• Reviewing tolerance levels

 

Course expectations

• Watch 23 videos
• Answer 4 knowledge questions
• Complete 1 interactive risk appetite test
• Answer 10 quiz questions

 

Time

• 3 hours of video content
• Approximately 4 hours for the whole course