By Jim Vesper, Ph D., ValSource Inc.
As someone who has been involved in risk management for a number of years, it has been interesting during COVID-19 to step back and reflect on some of my recent decisions and actions: Do we host a holiday party for 80 people? How about a smaller event for 30 people who all claim to have been fully vaccinated? Do we go to a restaurant that requires proof of vaccination? What about that gathering with some friends we haven’t seen in nearly two years but haven’t been vaccinated?
The responses to these questions – and many others – are based on how much risk we are willing to accept or reject, or more specifically in the vocabulary of risk management, our risk appetite and risk tolerance.
This article describes and differentiates risk appetite and risk tolerance and discusses why these two concepts are foundational to how we make risk-based decisions.Read Article