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Hi. My name is Amalia Barthel.
I'm an advisor, consultant,
and educator in the
areas of digital risk,
digital data risks, privacy,
compliance, and governance.
0:13
In this talk in the
digital risk series,
we will discuss a few
very important topics in
risk management and how
to adapt them in
the digital world.
These concepts are the
digital risk tone,
appetite, capacity,
thresholds, and universe.
We will demystify for the
audience these terms and at
the same time who in
the organization has the
role to set the tone,
appetite, risk capacity,
and ultimately the
risk thresholds?
Listeners will understand where
to look for these
metrics and how
to interpret the guidance
provided by the board
and senior executives.
0:55
About risk appetite, risk
capacity, and risk tolerance.
Let's start with
some definitions.
Risk universe is the
full amount of risk,
including the unknowns,
which could impact, either
positively or negatively,
the ability of
an organization to achieve
its long-term
mission (or vision).
The appetite is the
broad-based amount of risk in
different aspects of
an enterprise that
it is willing to accept in
pursuit of its mission.
Tolerance is the acceptable
level of variation that
management is
willing to allow for
any particular risk as
it pursues objectives.
In the discussion
about risk appetite,
the term risk capacity is
sometimes used as well.
This is usually defined as
the objective amount of loss
that an enterprise can tolerate
without risking its
continued existence.
As such, it differs from
risk appetite, which is
more a board or
management decision
on how much risk is desirable.
