This Precedent Risk appetite statement can be used to formulate and record an organisation’s position on risk. It sets out the overall approach to risk as well as the organisation’s appetite for different categories of risk, ie strategic, operational, reputational, legal, regulatory, financial, people and technological. It is also sometimes called a risk tolerance statement. A formal risk appetite statement may help to focus the minds of the board when an attractive but high-risk proposition presents itself, but ultimately the business’ true risk appetite is demonstrated by what it does rather than what it says.