Risk Appetite Demystified to Drive Good Decision Making
Risk Appetite – The Board sets it, the Executive champion it, managers operationalise it and staff need to live it.
If you want to increase the number of correct decisions made in your organisation, your goal must be to embed the Risk Appetite deep into the DNA of the organisation – RMP can help you achieve this.
Good risk taking is essential for business success, however research shows that the important and difficult decisions made by senior management are wrong around 50% of the time*. Therefore, improving the decision making within an organisation is a critical success factor, and furthermore, understanding Risk Appetite is a key opportunity for organisation to improve decision making.
No matter what stage your organisation is at on the Risk Appetite journey, this question needs to be considered: “How much time are people in my organisation spending on things that are not important to the success of the business?”
By driving an understanding of Risk Appetite deep into your organisation’s DNA, you will find that staff will be spending more time on value-creating activities, and spending less time dealing with the consequences of poor decisions.
An intelligent workforce can learn to adapt their decision making to defined boundaries if they fully understand the Risk Appetite of the organisation. Demystifying Risk Appetite is all about ensuring that management and staff are making decisions within the Risk Appetite of the organisation, as defined by a Risk Appetite statement.
In essence a well-articulated Risk Appetite statement should guide decision makers to act or not act, in pursuit of the organisation’s goals. A Risk Appetite statement must have substance and most importantly it must be relevant to the decisions people make and how they make them. It must also be closely tied to the business plan and the other fundamentals of the business.
Through this program, RMP will help you to build a bridge between your organisation’s Risk Appetite statement and the actual behaviour of staff. This is achieved by creating ‘translators’ that change risk-speak into “team speak”, and by allowing staff to work out how the requirements of management should be practically implemented.
If you want to increase number of correct decisions made in your organisation, your goal must be to embed the Risk Appetite required for your organisation’s success deep into the DNA of the organisation, deep into the subconscious of management and staff.
No matter what stage your organisation is at on the Risk Appetite journey, RMP can help you achieve this through a range of engagement programs and Risk Appetite workshops.
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