Writing a book is on many people’s bucket list. I had it on mine many years ago and was blessed to be able to tick it off in 2011 with A Short Guide to Operational Risk. Now some 13 years later I get to tick it off again! This time with Risk Appetite for Dummies: Protecht Special Edition, with the wonderful help from my Protecht colleagues and my fellow author, Brett McLaughlin from ‘For Dummies’.
The ‘For Dummies’ brand has given us a perfect platform to keep the topic of risk appetite real and understandable, as well as reach a wide global audience and allow us to keep spreading the ‘gospel’ of risk management. We are all so excited to be publishing this book, on such an important and in-demand topic of risk appetite. So often, the concept of risk appetite is misunderstood, is poorly developed and ends up providing little value other than to collect dust on the boardroom shelf.
The book takes a simple yet comprehensive approach to the principles of setting risk appetite. As a result, it should be a must-read for anyone who is looking to develop and improve their risk appetite statement and looking to operationalize it through the organization. It’s also great for non-risk managers and staff to understand why we have risk boundaries, how those boundaries are articulated and how they are used in guiding our behavior and decisions.
The book takes you on a risk appetite journey, from initial definition and key principles, through how risk appetite can be articulated and defined, onto how risk appetite can be used in the organization to guide decision making and behaviors. In addition, the link between risk, risk appetite and strategy is covered to ensure that the risk appetite statement is aligned to the success of the business.
The book also takes a very practical look at setting and defining risk appetite. A focus is the balance between setting risk appetite and determining the organization’s strategy and objectives. The trade-offs between risk and reward and the implications of setting risk appetite levels different from the current level of risk are considered in detail. In addition, the use of metrics (KPIs and KRIs) to articulate and report against risk appetite are addressed.
Lastly, we consider how risk appetite can be operationalized across the organization in meaningful ways so that non-risk staff can understand and apply in determining allowable behaviors and making good risk/reward decisions.
I hope you enjoy the book as much as I did writing it. You can download it here to take your risk appetite to the next level:
