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What is a Risk Appetite Statement?

A cybersecurity risk appetite statement is a formal document that outlines an organization's acceptable level of cyber risk. It essentially defines how much risk the organization is willing to tolerate in order to achieve its business goals. A risk appetite can be determined by conducting cyber risk assessments and quantifying the cyber risk data using NIST 800-30 or the FAIR risk methodology.

A cybersecurity risk appetite statement:

  • Provides Direction: It clarifies for everyone in the organization the level of cyber risk that is considered acceptable. This helps with decision-making at all levels regarding cybersecurity measures.
  • Alignment with Strategy: It ensures the organization's security posture aligns with its strategic objectives.
  • Communication Tool: It communicates the organization's cybersecurity philosophy to internal and external stakeholders, such as employees, executives, regulators, and investors. Risk appetite statements should be included when reporting cybersecurity to the Board

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