Embedding risk appetite through the business
October 2024
We have developed risk appetite statements with the board and they’re working quite well at the senior level. Now, the risk team is trying to decide: should we leave and optimise appetite as a tool to aid decision-making at the board/executive level only, or should it be cascaded down to other parts of the business?
Risk Leadership Network member
CRO at an ASX-listed retail organisation
1. Created a bespoke benchmark on risk appetite implementation and optimisation
With the member closely involved in developing the question set, we created a bespoke benchmark on risk appetite implementation and optimisation.
This benchmark enabled the member to see how 120 large non-financial organisations in a range of geographies and sectors are using risk appetite in their organisations. In particular, we wanted to understand how many of the participants just use appetite at the senior level and what percentage cascade it through the business.


2. Facilitated a series of 1-to-1 meetings
- Risk leaders at organisations we know have risk appetite cascading effectively down.
- Risk leaders who have optimised the use of risk appetite as a decision-making tool at board/executive level without cascading down.


3. Validated approach through a network meeting
Once the member had decided which approach to take, we organised a wider network meeting. At the members request, we invited peers who were more mature in their approach to attend.
The member presented their revised approach to experienced peers who gave feedback prior to implementation.


How this helped
Saved time
The member was able to take tried and tested methods back to their organisation to optimise risk appetite.
Externally validated approach to the board
The benchmarking data helped persuade their board that the risk team had chosen the right approach to risk appetite.
Gave direction to external consultants
As they were confident they’d chosen the right approach for their business, the member was able to direct their external consultants in a more targeted way, which helped avoid spiraling costs.