Page 497 - COSO Guidance

Risk Appetite — Critical to Success | 25

FINAL THOUGHTS

Organizations take risk to succeed. But risk can’t go
unchecked. Setting and understanding risk appetite is
an important element of corporate governance, strategic
planning, and decision-making. Determining appetite through
a performance lens requires deep discussions that affect
management and boards and, to be effective, permeate
an organization’s culture. In this way, appetite reflects the
mission and integrates with objectives with the end goal of
adding value. Monitoring complements the decision-making
lens of appetite and encourages all parts of the organization
to be on the same wavelength.

Making informed decisions considering risk takes effort. We
have seen first-hand how appetite helps improve the depth
of consideration in decision-making. We believe the effort is
worth it.

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