Decision details

Approval of Dorset Council’s Risk Appetite Statement

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

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.

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.

There are no immediate budget implications arising directly from the Risk Appetite Statement. However, future decisions informed by this framework may carry budgetary consequences, particularly in relation to the introduction of controls to manage risks. It is therefore essential that risk-based decisions are assessed with due consideration of potential budgetary impacts.