It made me smile earlier this week to be featured as 'author of the week' for Project Management World Journal, on on-line journal and extensive library of thought pieces on project management. It's a really good resource so you might want to take a look, or follow them on social media?
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The particular article in question revisited the work that David Hillson and I did in our book, 'A Short Guide to Risk Appetite' which was published in 2012. Since then I have worked with that topic lots in my former role as a KPMG Director, and more recently in my current role. Here's the start of the piece. The 'answer' for me can be summed up in the four C's in the title.
Here's the start of the article...
There is a growing recognition that a proper understanding of risk appetite is a vital influence on organisational performance. This is supported by regulators who expect boards to understand and express their risk appetite, and some senior executives in a range of public and private sector organisations are already taking a lead in this area.
This is a good start, but there is still confusion about how to define risk appetite and then use it to ensure that the organisation doesn’t take on too much risk (or too little).
Our book “A Short Guide to Risk Appetite” * (Hillson & Murray-Webster, 2012) attempts to dispel that confusion and provide clear advice on the topic.
There are four important factors to consider when defining risk appetite.....