Risk Appetite

A critical component of security governance is risk appetite, which is the level of risk an organization is willing to bear in pursuit of its objectives. Risk appetite sets the tone for venturing into new territories, while risk tolerance serves as the safety net, indicating when it’s time to pull back to protect the organization’s stability and objectives. Risk appetite usually falls into three categories, expansionary, conservative, and neutral, as follows:

• Expansionary risk appetite: Organizations with an expansionary risk appetite typically embrace higher levels of risk in an effort to foster innovation and gain a competitive edge. These organizations often prioritize growth and expansion and seek higher returns and market shares over stringent security protocols, potentially exposing them to a spectrum of threats.
• Conservative risk appetite: In contrast to those with expansionary appetites, organizations with a conservative risk appetite...