The intent of this document is to provide high level guidance to directors and senior executives on how to address this part of the Code, which essentially requires consideration of the subjects of ‘risk appetite’ and ‘risk tolerance’ (2011). This summary will tell you:
– what you need to know
– what you need to do, and
– where can you turn for more detailed guidance
It became apparent during the development of our paper that there is considerable interest in this topic in the public sector as well as the private sector, and also beyond the UK. So, while some specifics might differ, we feel that the underlying principles hold true for all sectors and all geographical locations. We have prepared this guidance under the overall direction of a working group of the Institute of Risk Management. Our work has produced this executive summary, which is designed to provide an overview of the subject for general use, particularly by board members, and a more detailed version which is primarily designed to assist those whose task it is to advise boards on these matters. The detailed version of our guidance is available for free download from IRM’s website.