Risk Appetite Framework Development and Implementation

A well-defined Risk Appetite Framework (RAF) and clear Risk Appetite Statements (RAS) are critical enablers for aligning risk management with an organization’s strategic objectives and achieving sustainable business success. This internationally acclaimed program immerses participants in the principles, tools, and methodologies essential for formulating, operationalizing, and embedding risk appetite across diverse organizational structures.

Through expert-led sessions and interactive exercises, participants will explore how to build governance structures around risk appetite, design actionable statements tailored to specific risk profiles, and link risk appetite measures to key business metrics such as KRIs and KPIs. Real-world case studies from banking and other sectors bring practical insight into the nuances of risk appetite implementation, enabling delegates to confidently drive a proactive risk culture and strategic alignment.

Overview

Target Audience

This program is designed for:

• Risk managers and senior risk professionals responsible for RAF development

• Chief Risk Officers and risk governance leaders

• Board members and executive management involved in strategic risk oversight

• Compliance and internal audit professionals

• Financial institutions and corporate governance specialists

• Consultants supporting risk appetite advisory and implementation

Detailed Course Schedule

Day 1: Foundations of Risk Appetite Frameworks

• Key Terms: Risk Appetite, Tolerance & Capacity

• The Goal of Effective Risk Management

• What is ‘Risk Appetite’?

• Characteristics of Effective Metrics for Risk Appetite

• Setting and Reviewing Risk Appetite

• Risk Appetite Determining Factors

• What is a Risk Appetite Framework?

• Generic Processes and Principles for RAF Development

• Core Elements of an RAF: Risk Capacity, Tolerances, Limits, and Profiles

• Role of Risk Owners

• Steps and Key Considerations in Developing an RAF

• Governance Obligations in RAF Establishment

• Categorization of Risk Types in Financial Institutions

• Operationalizing and Running an RAF

• Visualized Workflows for Developing Risk Appetite Measures

• Team Breakout Activities for Practical Application

Day 2: Developing and Implementing Risk Appetite Statements

• Objectives and Methodologies for Risk Appetite Statements (RAS) Across Risk Types (Market, Credit, Operational, etc.)

• Examples of RAS for Banking and Enterprise-wide Risk Governance

• Characteristics and Design Considerations for Effective RAS

• Format, Units of Measurement, and Tolerances in RAS

• Attributes and Management of Risk Limits

• Monitoring, Breach Management, and Reporting of Risk Appetite

• Common Challenges and Influencing Factors in Risk Appetite Implementation

• Embedding RAS into Business Culture and Strategy

• Benefits of Effective RAS Implementation

• Illustrative Examples of Risk Capacity, Appetite, and Limits in Practice

• Team Breakout Activities and Brain Teasers to Reinforce Learning

• Strategic Considerations for Aligning Risk Appetite with Business Strategy

• Achieving Balance Between Strategy and Risk Appetite Statements

• Final Remarks, Q&A, and Training Evaluation

2 Days Masterclass - CPD Certified Course - By KYR Consulting | Training | Advisory

Key Takeaways

By the end of this program, delegates will be able to:

• Understand the distinctions between risk appetite, tolerance, limits, and capacity

• Know how to structure and communicate an RAF that supports strategic decision-making

• Be equipped with methodologies to develop risk appetite measures linked to KRIs/KPIs

• Learn approaches to monitor, review, and manage risk appetite breaches effectively

• Gain insights into risk appetite challenges across industries, including banking and non-banking sectors

• Have practiced through breakout sessions and quizzes to reinforce practical knowledge

• Be prepared to lead the integration of risk appetite frameworks within their organizations

By attending this course, delegates will be able to:

• Gain exclusive insights into globally recognized RAF best practices and standards

• Understand core concepts of risk appetite, tolerance, capacity, and risk profile

• Learn how to design and implement an effective RAF aligned with ERM frameworks

• Develop clear, practical Risk Appetite Statements that resonate with organizational goals

• Apply governance principles to embed RAF into enterprise risk management and culture

• Utilize interactive tools and case studies for hands-on experience in RAF development

• Build confidence in articulating and operationalizing risk appetite across business functions

Key Learning Objectives