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What Real AI Risk Appetite Looks Like

Governance Theatre vs. Governance Substance

The Four Characteristics of a Real AI Risk Appetite Statement

Risk Acceptance and the Five Response Options

Explicit Risk Acceptance — Why Implicit Acceptance Is a Governance Failure

The Five AI-Adapted Risk Response Options

Risk Appetite Quiz — Identifying Governance Theatre

Foundation Model Risk and Emerging Risk Positioning

Assessment Dimension 4 — Foundation Model Risk Positioning

Assessment Dimension 5 and Practitioner Questions

The Three Lines Incompatibility Problem

The Prioritisation Framework — Governance Resources Must Follow Risk

Pillar Four: Risk Tolerance and Prioritisation. How to turn a directional risk appetite statement into a specific, differentiated, operationalisable, and regulatory-aligned governance instrument, with explicit risk acceptance and the five AI-adapted risk response options.

An AI risk appetite statement that says 'we take a measured and proportionate approach to AI risk, balancing innovation with safety' is a press release — not a governance instrument. Pillar Four is about replacing governance window-dressing with substance: specific, documented, enforceable positions on what risks the organisation will and will not accept, at what level of magnitude, for what types of AI use case, and under what conditions.

Module 7: Pillar Four — Risk Tolerance and Prioritisation

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