Risk Appetite Matrix

A Risk Appetite Matrix is a tool used to help organizations understand how much risk they are willing to take when pursuing their goals. It typically maps out different levels of risk (low, medium, high) against potential outcomes (acceptable, unacceptable). By visually categorizing risks, the matrix guides decision-makers in evaluating whether a proposed action aligns with their risk tolerance. This ensures that the organization can pursue opportunities while maintaining control over potential negative impacts, promoting informed decision-making and strategic planning.