Security Management Programs and Oversight: Risk Register, Tolerance and Appetite Flashcards
What is a risk register?
A risk register is a list of the risks associated with a system. Typically, it includes additional information associated with the risk element, such as:
Category.
Probability.
Impact.
Possible mitigation.
Other key values:
Key Risk indicators
Risk Owners
Risk Threshold
What is involved in Risk Tolerance?
Risk tolerance
Risk tolerance refers to the level of uncertainty or potential loss that a company is willing to accept in pursuit of its business objectives. It helps determine the boundaries within which the company can operate without compromising its financial stability or strategic goals.
What is risk Appetite?
Risk appetite describes a company’s tolerance for risk. Three commonly used descriptions for a company’s risk appetite
Expansionary
Conservative
Neutral
What is the appetite for expansionary?
Expansionary: Reflects a willingness to actively pursue opportunities even in the presence of higher inherent risks. This strategy often involves:
Embracing innovation.
Entering new markets.
Making strategic investments to achieve significant growth and competitive advantage.
What is the appetite for Conservative?
Conservative: Entails a strong preference for minimizing potential risks and prioritizing stability and preservation of capital. Such an approach often involves:
Avoiding high-risk ventures.
Maintaining a strong financial cushion.
Focusing on gradual and well-calculated business decisions.
What is Appetite for Neutral?
Neutral: Signifies a balanced stance where risks are evaluated pragmatically, neither aggressively pursuing opportunities nor overly cautious. This approach typically seeks a middle ground by carefully considering potential rewards against potential risks and aligning strategies with the organization’s overall objectives.
