Risk Appetite Statement for [Your Company’s Name]

1. Introduction

[Your company’s name] is committed to achieving its strategic objectives in [Your company’s strategic objectives] while managing and mitigating risks to an acceptable level. This risk appetite statement articulates the levels and types of risk we are willing to pursue or accept in these areas to ensure sustainable growth, operational excellence and robust security standards.

2. Strategic Objectives
Objective 1	[Define your first and highest-priority objective here.]
Objective 2	[This is your second highest-priority objective. It may be comparably important, but it relies on achieving the first objective.]
Objective 3	[This is your third highest-priority objective. It may be comparably important, but it relies on achieving the second objective.]
Objective n	[Etc. -- add objectives and rows to table as necessary.]

3. General Risk Appetite

[Your company’s name] adopts a balanced approach to risk, recognizing that not all risks are equal and that some level of risk is necessary to achieve our strategic goals.

[Customize or add to the example sections and assign a level of risk (very low, low, moderate, high, or very high) and accompanying explanation to each. Delete and replace the following examples to fit your organization.]

Innovation Risk: We have a [high] risk appetite for investing in advanced technologies and innovative solutions that differentiate our products in the competitive landscape. We understand this requires accepting a degree of uncertainty in R&D and product development.

Operational Risk: We maintain a [low to moderate] risk appetite. While striving for operational excellence, we prioritize initiatives that improve efficiency and service quality without compromising our delivery standards.

Security Risk: We have a [very low] risk appetite for security threats and breaches. Our commitment to network security and data protection is paramount, and we invest substantially in safeguarding our systems and our clients’ data.

Compliance Risk: We have a [low] risk appetite for non-compliance with legal and regulatory requirements. Ensuring adherence to relevant laws, standards, and best practices in all operational areas is critical.

4. Specific Risk Categories

[Customize or add to the example sections and assign a level of risk (very low, low, moderate, high, or very high) and accompanying explanation to each. Delete and replace the following examples to fit your organization.]

4.1 Product Development and Innovation

Appetite: [High]

Explanation: [We are willing to take calculated risks in product development to achieve breakthrough innovations. This includes investing in new technologies, acquiring startups, and undergoing strategic partnerships. Failures are considered part of the process, provided they lead to learning and future success.]

4.2 Technological Adoption

Appetite: [Moderate to high]

Explanation: [Adoption of emerging technologies to enhance our product offerings is encouraged. However, thorough risk assessments and pilots are mandatory to mitigate potential operational disruptions.]

4.3 Operational Efficiency

Appetite: [Moderate]

Explanation: [While improving operational efficiency is critical, it should not compromise service quality. We will adopt process improvements that offer substantial benefits but are cautious of overly disruptive changes.]

4.4 Cybersecurity

Appetite: [Very low]

Explanation: [Given the nature of our business, maintaining the highest security standards is non-negotiable. Investments in cybersecurity measures and continuous monitoring will remain a top priority to mitigate this risk.]

4.5 Financial Risk

Appetite: [Low to moderate]

Explanation: [We aim for financial stability with a conservative approach to debt and investments. Risky financial strategies that might jeopardize the company’s financial health are avoided.]

5. Implementation and Review

Monitoring and Reporting: Regular monitoring of risk exposure and reporting to senior management and the board is essential to uphold this risk appetite.

Review Cycle: This risk appetite statement will be reviewed annually or more frequently if significant changes occur in the business environment or strategic objectives.

6. Conclusion

This risk appetite statement sets the tone for risk management at [Your company’s name]. By balancing risk and reward, we aim to navigate the complex landscape of [Your company’s strategic objectives], ensuring lasting success and customer satisfaction.

Approved by: [Senior Management Team/Board of Directors]

Date: [Date]