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Citation Reference: Using Risk Appetite ¶ 1

Citation Guidance: Risk appetite guides how an organization allocates resources, both through the entire entity and in individual operating units. The goal is to align resource allocation with the entity's mission, vision, and core values. Therefore, when management allocates resources across operating units, it considers the entity's risk appetite and individual operating units' plans for creating value. For instance, management may choose to allocate a greater portion of resources to those business objectives with a lower risk appetite versus those business objectives with a higher risk appetite. The organization seeks to align people, processes, and infrastructure to successfully implement strategy and business objective while remaining within its risk appetite.