A company's risk appetite may affect how it is perceived by key stakeholders including shareholders, regulators, rating agencies, and customers. When risk appetite is properly understood and clearly defined, it can become a powerful tool. This whitepaper explores how an organization's risk appetite can not only help manage risk, but enhance overall business performance.

The issue is deceptively simple: How much risk is an organization willing to take in order to attain appropriate or sought-after returns? In practice, answering the question can be exceedingly difficult. Thinking about risk appetite is often unclear, definitions are vague and contradictory, and the gap between theory and practice is wide. Efforts to quantify risk appetite can sometimes produce an illusion of precision.

Nevertheless, as this white paper points out, many leading enterprises are demonstrating that a clearly understood and articulated statement of risk appetite can help unlock value by better aligning decision-making and risk.