Appetite Alignment

The process of continuously aligning an organization's current risk exposure to its defined risk appetite. This critical component of operating within appetite helps organizations understand if their current level of risk-taking is aligned to their chosen business strategy. The alignment process involves regular monitoring and management to ensure risk levels remain within acceptable boundaries while pursuing strategic objectives. The Appetite Alignment Matrix is a key visualization tool that demonstrates where organizations may be taking too much risk (over-exposed) or not enough risk (under-exposed) relative to their stated appetite.