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Risk appetite

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How much risk, and of which kinds, an organisation is prepared to take on in pursuit of its objectives 1. In this book it is compiled from an approved statement into a versioned data file that gates read, rather than left in a board paper.

Developed in
ch. 13, Risk appetite and tolerance, compiled into gates
Chapters
ch. 13, Risk Management
Contrast with
Risk tolerance
Source
1 numbered reference, listed below

Commonly confused

  • Risk appetite versus Risk tolerance

    Risk appetite
    How much risk, and of which kinds, an organisation is prepared to take on in pursuit of its objectives.
    Risk tolerance
    The readiness to bear a given risk in order to achieve objectives.

    The differenceHow much risk the organisation will take on overall, against the residual band one system may carry.

    Why it mattersAppetite is a board statement compiled to data; tolerance is the threshold a deploy gate reads.

Where it is used

5 chapters of the Body of Knowledge use the term. Each link opens the first section that does.

Sources

  1. [1] ISO 31073:2022, Risk management: Vocabulary (replaced ISO Guide 73:2009, withdrawn; referenced by identifier only). ISO/TC 262. 2022-02. https://www.iso.org/standard/79637.html (verified: primary)

Definitions of legal terms paraphrase the cited text, which governs. Dated statements are as of .

Cite this term

García Aibar, J. (2026). Risk appetite. In AI Governance Engineering: The Thesis & Body of Knowledge (v0.5.0), Glossary. https://doi.org/10.5281/zenodo.22956197. https://aigovernanceengineer.com/glossary/risk-appetite. CC BY 4.0

BibTeX

@misc{aige2026riskappetite,
  author  = {Jorge García Aibar},
  title   = {{Risk appetite}},
  note    = {Glossary, AI Governance Engineering: The Thesis \& Body of Knowledge, version 0.5.0},
  year    = {2026},
  doi     = {10.5281/zenodo.22956197},
  url     = {https://aigovernanceengineer.com/glossary/risk-appetite}
}