Risk Appetite vs. Risk Tolerance: What is the Difference?

In this episode of the ITSM Practice podcast, Luigi Ferri delves into the critical distinctions between Risk Appetite and Risk Tolerance, emphasizing their pivotal roles in strategic decision-making. Luigi meticulously explains how these concepts guide organizations in navigating their journey towards achieving strategic goals while balancing potential risks and rewards. Featuring nuanced examples and authoritative explanations, this episode offers valuable perspectives for leaders dedicated to refining their Risk Management strategies.

In this episode, we answer to:

What is the difference between Risk Appetite and Risk Tolerance?

How do Risk Tolerance and Appetite levels influence organizational decision-making?

What factors drive an organization's willingness to take Risks?

Resources Mentioned in this Episode:

PECB, article "What Is Risk Tolerance, Why Is It Important, and How to Determine It?", link https://pecb.com/article/what-is-risk-tolerance-why-is-it-important-and-how-to-determine-it

Professional Certifications, article "Risk Appetite vs. Risk Tolerance", link https://learn31000.com/risk-appetitive-vs-risk-tolerance/

Splunk, article "Risk Tolerance vs. Risk Appetite Explained", link https://www.splunk.com/en_us/blog/learn/risk-tolerance-vs-risk-appetite.html

ISACA, article "Risk Appetite vs. Risk Tolerance: What is the Difference?", link https://www.isaca.org/resources/news-and-trends/isaca-now-blog/2022/risk-appetite-vs-risk-tolerance-what-is-the-difference

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Credits:

Sound engineering by Alan Southgate - http://alsouthgate.co.uk/

Graphics by Yulia Kolodyazhnaya