What is Risk Appetite?

In project management, risk appetite is similar to determining your tolerance level for how much risk you’re okay with throughout a project, similar to understanding how much adventure you’re up for in a game or voyage. It is about determining how much uncertainty or possible issues you are ready to accept in order to achieve the goals of your project. Some projects may be more willing to take risks in exchange for possibly greater benefits, whilst others may choose to play it safe. Understanding your risk appetite assists in determining the types and degrees of risks that the project is willing to confront or avoid, ensuring that everyone engaged is on the same page about how much risk is acceptable.