A Short Guide to Risk Appetite

Risk appetite is a hot topic, driven both by corporate governance requirements and senior managers' need to make risk-based decisions. But despite the high level of interest, there is no consensus on what risk appetite is, how it should be expressed or measured, or how it can be practically used in business or projects. In A Short Guide to Risk Appetite David Hillson and Ruth Murray-Webster cut through the confusion to produce clear definitions and simple guidelines, helping us to answer the important question: 'How much risk should we take?

Autorentext

David Hillson is a recognised global authority on risk management, with a reputation and track record of blending leading-edge thinking with practical expert application. David is a frequent author and speaker on risk.

Zusammenfassung
How much risk should we take? A Short Guide to Risk Appetite sets out to help all those who need to decide how much risk can be taken in a particular risky and important situation. David Hillson and Ruth Murray-Webster introduce the RARA Model to explain the complementary and central roles of Risk Appetite and Risk Attitude, and along the way they show how other risk-related concepts fit in. Risk thresholds are the external expression of inherent risk appetite, and the challenge is how to set the right thresholds. By progressively deconstructing the RARA Model, the authors show that the essential control step is our ability to choose an appropriate risk attitude. The book contains practical guidance to setting risk thresholds that take proper account of the influences of organisational risk culture and the individual risk preferences of key stakeholders. Alongside this, individuals and organisations need to choose the risk attitude that will optimise their chances of achieving the desired objectives.

Inhalt

Contents: Foreword; Preface; Why is risk appetite important?; The risk appetite story so far; Terminology wars; Putting the pieces together: the RARA model; Applying the RARA model: making risk-informed decisions; Practical implications: what can we measure?; Using the RARA model in practice; Conclusions; Index.