RISK APPETITE STATEMENT AS MULTINATIONAL ENTERPRISES’ INNOVATIVE RISK MANAGEMENT TOOL

Анотація

This article analyzes the preconditions and genesis of the concept of risk appetite from the first works on rational decision problem in the conditions of risk and uncertainty, researched by John von Neumann and Oscar Morgenstern in the mid of 20th century within the description of the utility function, to the modern use of Risk Appetite Statement as an innovative risk management tool of the multinational enterprises (MNE). A special focus is placed on the practical use and benefits of the Risk Appetite Statement within the process of internationalization and MNE development of the both financial and non-financial sectors of economy of the US, European Union and Ukraine. The paper argues that the Risk Appetite Statement tool not only sets limits on risks, but also provides other important advantages for MNE in forming a business development strategy and implementing key projects. Practical application of the Risk Appetite Statement in the largest state-owned enterprise of Ukraine NJSC "Naftogaz of Ukraine" is considered in detail.

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