The standard definition of risk appetite is “the amount of risk you are willing to take in the pursuit of objectives”.
Let me tell you a story because it is the time of year for fables. A Scottish company (Dundee Ltd) is growing rapidly after only a couple of years in existence and needs to find a supplier that has the capacity to scale up to meet increasing demand.
Norman Marks discusses points from a recent paper, Feeling hungry? A simpler, more intelligent approach to risk appetite, written by Chris Burt of Halex Consulting.