What’s your ‘risk appetite?’
Develop a statement that outlines your risk tolerance.
Organizations often prioritize risk management only during bad times, says Steve Houle, vice president, advisory service, for Catalyst Corporate Federal Credit Union.
“That’s the wrong way to manage,” says Houle, who addressed the 2019 CUNA Finance Council Conference Tuesday in New York City. “While credit unions are strong, we need to focus now on potential risks we’re facing. During bad times, we just react. Then it’s too late.”
Creating a “risk appetite statement” can help credit unions maintain a strong risk management focus, he says.
A risk appetite statement should explicitly note the level and nature of risk you’re willing and able to take to pursue your mission.
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