Common use of Risk appetite Clause in Contracts

Risk appetite. Risk appetite is the level of risk that may be contained in the Project to maximize value. The risk appetite is determined by the policy setters in the Project and defines the limits of exposure to risk that they are willing to undertake. The risk appetite reflects the operation and execution strategy of the Project, its goals, the business plans and the expectations of interested parties, the willingness and ability to take risks and it may change with time. Field Sample Declarations on risk appetite Finances / investments / budget * Maintaining a cash flow that allows ongoing operations * Maintaining compliance with budget goals / budget supervision on large projects * Maintaining a minimal investments budget Regulation * Rate of internal regulation violations (internal procedures) * Zero tolerance for violations in the field of local and international compliance Security * Number of security events - harm to employees / clients, no more than X incidents per year * Zero tolerance to security faults that affect air traffic * Zero tolerance to loss of life or severe injury Environment * Minimum environmental pollution Goodwill * Reduction of the number of negative publications in the national and international media * Zero tolerance to cases of refusal of an international airline to arrive in the airport as a result of goodwill Here are examples of declarations on risk appetite and the way to turn them into quantitative indicators: