Set Risk Appetite Before Scoring
Define risk appetite before using a likelihood-impact matrix to prioritize strategic options.
The matrix is not the decision. It is a trigger for a decision rule. What the matrix does Likelihood and impact help compare risks. The matrix makes exposure visible and supports prioritization, especially when the team is comparing different types of risk. What appetite does Risk appetite defines what exposure the organization is willing to carry in pursuit of the strategy. It connects risk to governance: accept, mitigate, transfer, avoid, or escalate. Why this belongs with strategy Porter and SWOT explain why a risk exists and why you may or may not be equipped for it. Appetite decides whether the…
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