Operational Risk Programme: Defining Risk Appetite and its defining role in managing Risk and ESG – Without disappearing down a rabbit hole

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Session 5

This is a three-hour live instructor-led Zoom courses focusing on the real business value that can be obtained from using risk appetite frameworks, statements and limits. This is now even more important as firms move to manage their ESG targets using appetite to guide them.

The ability to evaluate, design and monitor risk appetite is fundamental to a firm’s well-being and successful growth. Many firms find it difficult to clearly state their operational risk appetite, preferring to use terms such as ‘We have a low overall appetite’. This course will show you how to state your operational risk appetite both qualitatively and quantitatively, clearly and precisely on a risk-by-risk basis. Evaluate your risk appetite work against good and best industry practice. The course will also review the easier-to-grasp concept of control appetite and show how control appetite is the more straightforward part of risk appetite.

The course is based on the very successful post-graduate rated Operational Risk Appetite module of the Operational Risk Professional course which RiskLogix has run for over six years. It is suitable for operational risk professionals as well as new joiners to risk management. It is also fully aligned with those who have an interest in understanding the business benefits that can be gained through good risk management. Jargon is avoided (or explained where it is necessary to use it). No prior risk management experience is necessary, although an open and enquiring mind is essential. Questions from delegates at any time are encouraged and the course is deliberately open and participative.

You will learn:

How to align your risk profile with your risk appetite

How to ensure that your control needs fit your cost budget

How to manage your risk appetite governance (without disappearing down the rabbit hole)

How other firms are reporting risk appetite to their Risk Committee and Board

How control appetite is easier and more powerful than risk appetite, and contributes to it

Your instructor is Professor Tony Blunden who has worked in the City of London for over thirty years primarily within risk management and related areas in financial services organisations. Prior to joining RiskLogix, he spent four years as Director of Operational Risk within the Financial Services Risk Management Practice at Ernst & Young. Tony’s area of focus is the identification and development of clients’ needs in risk management.

Client consulting engagements have included advising and guiding on risk frameworks, governance and culture, risk and control assessments, indicators of key risks, loss databases and their use, scenarios and stress tests, modelling of operational risk and risk reporting as well as risk appetite, the use of six sigma,

ICAAP, ILAAP and enterprise wide risk management. Risk appetite frameworks and model validation have been a particular feature of Tony’s work in the last few years.

Tony is a frequent conference and bespoke training speaker having spoken at over 150 international risk and compliance conferences. He is also a well-known author of articles, chapters and books on risk management and compliance. His previous book (co-authored with John Thirlwell) ‘Mastering Operational Risk’ sold over 12,000 copies, has been translated into Chinese and is published by FT Publishing. His new book (also co-authored with John Thirlwell) is ‘Mastering Risk Management’ and was published by FT Publishing in February 2022. He has been appointed an Honorary Professor by Glasgow Caledonian University. Tony is also a Fellow of the Chartered Governance Institute.

Tony is recognised throughout the industry as a world leading authority on operational risk and brings deep domain knowledge and the practical experience of advising a considerable number of blue chip companies on risk management.

This course is part of a series of five each of which has clear learning objectives linked to the content. At the end of each course, delegates will be expected to be able to carry out the tasks stated in the learning objectives (see each individual course details on the RiskLogix website https://risklogix-solutions.com/risk-training ).

The series answers the following common concerns of many financial services firms and focuses on the business side of operational risk management:

Why are Risk Control Self Assessments (RCSAs) not making business sense?

Why do we have too many Key Risk Indicators (KRIs) and not enough business benefit?

What is the business point in loss analysis?

Aren’t stress tests and scenarios one step too far for the business?

Is our risk appetite too quantitative, or too qualitative?

Each course is stand-alone and can be taken separately. All five courses taken together give an unequalled view of operational risk management.

Please click here for direct access to details on this course.

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