Purpose

Approval
of Dorset Council’s Risk Appetite Statement

Content

That the Dorset
Council’s Risk Appetite Statement be approved.

Reasons for the decision

Following an audit
conducted in 2022 by Dorset Council’s internal auditors, the Southwest Audit
Partnership (SWAP), the organisation was tasked with establishing an acceptable
risk profile for the organisation. This has since been adopted through the development
of a Risk Appetite Statement as outlined in the Audit and Governance Committee
Risk Management Update, 04 August 2025.

 

Risk appetite
defines the level of risk Dorset Council is willing to accept in pursuit of its
objectives. It provides a structured framework for determining where the
Council may adopt higher or lower levels of risk. This is a conscious decision
shaped by both internal and external factors influencing the organisation.

 

Total risk
avoidance is neither practicable nor sustainable, and the Council does not
possess the resources to mitigate all risks equally. By aligning risk appetite
with the Council’s Principal Risks that were agreed with the Council Plan 2024
- 2029, Dorset Council gains a strategic tool that facilitates risk-informed
discussions across all levels of the organisation, enhancing decision-making.

 

Our approach to
risk appetite includes a high-level statement that articulates the Council’s
stance on risk-taking, supported by selections made within the risk appetite
framework, detailed in the Audit and Governance Committee Risk Management
Update, 04 August 2025.

Alternative options considered

The concept of a
Risk Appetite Statement is new to Dorset Council. While various interpretations
exist, they are typically tailored to the specific internal and external
contexts of each organisation. As such, there is no universal approach;
existing guidance tends to outline what a Risk Appetite
Statement is and why it is important but offers limited
direction on how it should be developed.

 

Given this, Dorset
Council has opted to develop its Risk Appetite Statement internally, leveraging
the expertise of its dedicated Risk Management & Reporting Officer within
the Policy, Intelligence and Performance Service, with methodology endorsed by
the Audit and Governance Committee.