RIMS executive report outlines steps to successful risk taking

SAN DIEGO – RIMS, the risk management society, issued a new executive report Tuesday that explores how a formal risk appetite and risk tolerance statement “can become a powerful strategic tool for not only managing risk, but also for maintaining an effective balance between risk and reward.”

“Aligning these statements with strategy has sparked a shift from organizations focusing on the impact of risk to informed risk-takers,” Frank Fiorille, report author and chair of the RIMS Enterprise Risk Management Committee, comments in a statement from RIMS.

Steps to Successful Risk Taking: Developing an Effective Risk Appetite and Risk Tolerance Statement, a follow-up to 2012 report from RIMS, was released at the 2016 RIMS Conference & Exhibition in San Diego.

The executive report explains the steps to successful risk taking, highlights industries’ risk statement development process, defines commonly used terms, outlines the characteristics of a well-defined corporate risk appetite statement and offers strategies for connecting statements to strategy.

“In addition to providing stakeholders with a better understanding of how the organization will approach uncertainties, the risk appetite development process also promotes productive conversations that positively contribute to the organization’s future,” Fiorille suggests.

The report was authored by Fiorille, senior director of risk management for Paychex Inc.; Robert Gould, director of internal audit for Harley-Davidson, Inc.; Linda Conrad, director of strategic business risk for Zurich Group; Grace Crickette, associate vice president of business operations for San Francisco State University; and Carol Fox, vice president of strategic initiatives for RIMS.

The report – available at www.RIMS.org/RiskKnowledge – is free for both RIMS members and non-members.

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