Episode 10 — Set AI Risk Appetite and Tolerance That Leaders Can Defend (Domain 1)
Defining risk appetite and tolerance is a critical exercise that allows leadership to communicate the level of risk the organization is willing to accept in pursuit of AI innovation. In this episode, we distinguish between risk appetite—the high-level statement of risk preference—and risk tolerance, which provides specific, measurable thresholds for individual AI projects. For the AAIR certification, understanding these concepts is vital for developing a risk framework that is both flexible and defensible. We explore how to set quantitative metrics, such as maximum allowable error rates or data privacy thresholds, and how to communicate these to stakeholders in a way that informs decision-making. Defensible risk settings are based on a thorough understanding of the regulatory landscape and the organization's overall risk capacity. By establishing these markers, risk professionals provide the clear guidance necessary for development teams to build AI solutions that align with the board’s expectations and the organization’s long-term stability. Produced by BareMetalCyber.com, where you’ll find more cyber audio courses, books, and information to strengthen your educational path. Also, if you want to stay up to date with the latest news, visit DailyCyber.News for a newsletter you can use, and a daily podcast you can commute with.
