Risk appetite provides the glue to link Performance and Risk

Many advances have been developed since the emergence of risk management as a distinct discipline in the 1990s, and whilst a number of these have been valuable there has been a focus on the technical processes of risk management that have sometime become divorced from the business realities and overall objective of risk management - keeping the businesses safe and improving performance through enhancing the achievement of business objectives.  It is welcome, therefore, to find this return to a practical approach to risk that provides effective end-to-end linkage of the business strategy, performance management and risk management.  The RBPM approach combines a sound conceptual framework for strategy, performance and risk, underpinned by experience and evidence of its use in real business situations, with an effective toolset for the implementation of the framework in your business.  The concept of risk appetite, for long the problem child of risk management frameworks, provides the glue to link the elements of the framework and allows the business to monitor its risk exposures - not only preventing excess risk, but also providing insight as to when the business is not taking on sufficient risk to maximise opportunity.  A valuable read with practical application for risk management, strategists and senior management in all business sectors.

Rob Smith, Risk Director, Asset Management, United Kingdom