EIG’s third Webinar on “Building a Resilient Enterprise” focuses on understanding your risk appetite.
In a recent McKinsey Risk Report, they articulated risk appetite this way. The risk profession has defined risk appetite as— “the aggregate level and types of risk the board of directors and management are willing to assume to achieve its strategic objectives and business plan, consistent with applicable capital, liquidity, and other regulatory requirements.”
McKinsey dug a bit deeper into this fascinating aspect of risk management and came up with this analysis. From a practical standpoint, “risk appetite is about setting boundaries around a company’s risk activities that could take the form of setting limits for business divisions, geographical regions, sectors, industries, products, top customers, and other customers based on their risk grade.”
We walk through the many aspects and threads associated with this HUGE critical success factor of risk management that can enable, accelerate, or kill the building of a Resilient Enterprise. It’s all about culture!
