Risk Glossary

Risk Capacity and Risk Appetite

  • Risk Appetite
    • amount and type of risk that an organization is willing to pursue or retain. (ISO/Guide 73:2009)
    • the degree of uncertainty an entity is willing to take on, in anticipation of a reward. (PMBOK 5th Edition)
  • Risk Tolerance
    1. assessed and accepted threshold levels of risk exposure that when exceeded will trigger a risk response. (ISO/TR 21506:2018)
    2. organization’s or stakeholder’s readiness to bear the risk after risk treatment in order to achieve its objectives. (ISO Guide 73:2009)
    3. the degree, amount, or volume of risk that an organization or individual will withstand. (PMBOK 5th Edition)
  • Risk Threshold
    • A condition that triggers some stakeholder action. (ISO/IEC 16085:2006)
    • measure of the level of uncertainty or the level of impact at which a stakeholder may have a specific interest. Below that risk threshold, the organization will accept the risk. Above that risk threshold, the organization will not tolerate the risk. (PMBOK 5th Edition)

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