Risk Tolerance [deprecated] is the degree of uncertainty that an organization or individual is willing to withstand.
While previously used to describe acceptable levels of risk, the term has been deprecated in favor of more precise concepts such as risk appetite and risk threshold, which separately address strategic intent and measurable limits.
Key Characteristics
- Conceptual Precursor – Historically used to describe comfort with uncertainty
- Broadly Defined – Lacked the specificity of newer terminology
- Replaced by Modern Terms – Superseded by risk appetite (strategic) and risk threshold (measurable)
- Still Referenced Informally – May appear in legacy documentation or stakeholder language
Example Scenarios
- Referring to an executive’s tolerance for project delay without specifying the threshold
- Using “tolerance” in general discussion before formalizing thresholds in a risk plan
- Encountering legacy frameworks that still include the term
Role in Risk Communication
- Clarifies Evolution of Terminology – Helps bridge understanding between old and new standards
- Highlights Shift to Precision – Emphasizes the need for measurable and strategic definitions
- Informs Legacy Reviews – Useful when interpreting historical plans and policies
- Reinforces Governance – Encourages use of current, well-defined risk terms
See also: Risk Appetite, Risk Threshold, Risk Management Plan, Governance, Risk Strategy.