Set leverage appetite before the market tests it
Use risk appetite to guide leverage decisions before capital markets tighten.
Board moment The acquisition is strategic, but the leverage stretch would last four quarters unless asset sales close on plan. If risk appetite is defined only after a deal appears, the board debates desire instead of boundaries. COSO ERM lens Risk appetite links strategy, performance, and boundaries A leverage decision should say how much risk the REIT will accept to pursue growth, and what action restores the balance sheet if conditions change. Shortcut Call leverage temporary and approve the deal. The board can approve risk intentionally rather than inherit it accidentally. A risk appetite statement should make the next decision…
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