--- name: cyber-risk-appetite-statement-generator description: "Drafts a board-ready cybersecurity risk appetite statement aligned with COSO ERM, covering qualitative appetite narrative, six cyber risk categories with quantitative tolerance thresholds, escalation triggers, and a governance review cadence calibrated to the organization's industry, size, and regulatory environment. Use when establishing or refreshing a cyber risk appetite statement, preparing risk governance materials for a board committee, or aligning security tolerance thresholds with enterprise strategy." argument-hint: "[industry] [regulatory-environment]" allowed-tools: ["Read"] --- # Cyber Risk Appetite Statement Generator ## Purpose Produce a structured, board-approvable cybersecurity risk appetite statement that translates strategic priorities into explicit tolerance thresholds, risk-category positions, and escalation triggers — aligned with COSO ERM. Solves the gap between vague "we take security seriously" language and the quantified, defensible appetite boundaries that boards, regulators, and auditors expect. ## When to Use Invoke this skill when the user asks to: - Draft or refresh a cyber risk appetite statement for board or committee approval - Translate enterprise strategy into specific cybersecurity tolerance thresholds - Define escalation triggers for when cyber risk exceeds acceptable bounds - Prepare risk governance documentation for a Board Risk Committee or audit - Align cybersecurity risk positions with a regulatory framework (e.g., SEC, GDPR, HIPAA, DORA, NYDFS) - Establish quantified appetite/tolerance/capacity distinctions for cyber risk ## Inputs Required Before starting, collect: - **Industry/sector**: The market the organization operates in (drives threat profile and regulatory exposure) - **Organization size**: Revenue band, employee count, or asset base — and whether public, private, or regulated entity - **Regulatory environment**: Applicable frameworks (e.g., SEC cyber disclosure, GDPR, HIPAA, PCI-DSS, DORA, NYDFS 500, NIST CSF mandate) - **Strategic priorities**: 2–4 business objectives the appetite must support (e.g., digital transformation, M&A, cloud migration, market expansion) - **Current risk posture**: Self-assessed maturity (averse / cautious / balanced / aggressive) and any known appetite the board has expressed - **Crown-jewel assets**: The data, systems, or services whose compromise would be most damaging - **Quantitative anchors (if available)**: Tolerable downtime, acceptable financial loss per incident, regulatory penalty exposure If quantitative anchors are missing, derive proportional defaults from organization size and industry, and flag each derived threshold as an assumption for board calibration. ## Instructions ### Step 1: Establish the Appetite Foundation (COSO ERM Alignment) Open by anchoring the statement in COSO ERM's three-tier distinction so the board reads it correctly: - **Risk appetite**: The amount and type of cyber risk the organization is willing to accept in pursuit of strategy - **Risk tolerance**: Acceptable variation around appetite for a specific category — expressed as a measurable threshold - **Risk capacity**: The maximum risk the organization can absorb before viability is threatened Write a 2–3 sentence linkage statement connecting cyber appetite to the strategic priorities provided. The appetite must visibly serve strategy, not merely restrict it. ### Step 2: Draft the Qualitative Appetite Narrative Produce a 120–180 word narrative that states the organization's overall cyber risk stance in plain board language. It must: - Name an overall posture (averse / cautious / balanced / aggressive) and justify it against industry threat profile and regulatory exposure - State explicitly where the organization will accept higher risk (to enable a strategic priority) and where it will accept none (crown-jewel assets, regulated data, safety systems) - Avoid hollow assurances — every sentence must be falsifiable against a later threshold ### Step 3: Define Six Cyber Risk Categories with Tolerance Thresholds For each category, provide: appetite position (one of: No Appetite / Low / Moderate / High), a quantified tolerance threshold, and the rationale tied to strategy or regulation. **Category 1 — Data Confidentiality & Privacy** Unauthorized disclosure of regulated or sensitive data. - Threshold examples: zero tolerance for breach of regulated PII/PHI; defined acceptable count of low-severity exposures per year - Calibrate to the regulatory environment (GDPR/HIPAA/PCI implications) **Category 2 — Operational Resilience & Availability** Disruption to critical systems and services. - Threshold examples: maximum tolerable downtime (MTD) for crown-jewel systems; recovery time objective (RTO) ceilings - Tie to industry continuity expectations and any DORA-style resilience mandate **Category 3 — Third-Party & Supply Chain Risk** Risk introduced by vendors, partners, and software dependencies. - Threshold examples: maximum acceptable critical vendors without completed assessment; concentration limits on single providers - Reflect the organization's dependency profile and crown-jewel access by third parties **Category 4 — Regulatory & Compliance Risk** Exposure to fines, enforcement, and mandated disclosure. - Threshold examples: zero appetite for material control gaps in mandated frameworks; defined tolerance for non-critical audit findings - Anchor to the specific regulatory regime and disclosure timelines (e.g., SEC 4-business-day materiality) **Category 5 — Financial & Fraud Risk** Direct and indirect financial loss from cyber events. - Threshold examples: maximum single-incident loss tolerance; aggregate annual loss tolerance as a % of revenue or EBIT - Distinguish tolerance (acceptable variation) from capacity (viability ceiling) **Category 6 — Emerging Technology & Innovation Risk** Risk from AI adoption, cloud migration, and new digital initiatives. - Threshold examples: acceptable risk on non-production/experimental systems vs. zero on systems touching crown jewels - This category should explicitly enable the strategic priorities — set a higher, governed appetite where innovation is a stated objective ### Step 4: Define Escalation Triggers Build a three-tier escalation model mapping breach severity to ownership and timing: - **Tier 1 — Within tolerance (monitor)**: Owner = security operations; review at standard cadence - **Tier 2 — Approaching threshold (escalate to management)**: Owner = CISO/CRO; trigger defined as a quantified breach of a soft limit; action and timeline required - **Tier 3 — Breach of appetite (escalate to board committee)**: Owner = Board Risk Committee; trigger defined as breach of a hard threshold or any No-Appetite event; specify notification window aligned to regulatory disclosure obligations For each tier, state the quantified trigger condition, the accountable role, the required action, and the maximum time to escalate. ### Step 5: Define Governance, Review, and Attestation Specify the operating rhythm: - Review cadence (annual statement review; quarterly threshold monitoring; event-driven re-evaluation after a major incident or strategic shift) - Roles and accountability (board owns appetite; CRO/CISO owns operationalization and reporting) - Attestation and metrics: the 4–6 leading and lagging indicators the board will use to verify the organization is operating within appetite ## Output Format - **Structure**: Formal governance document with numbered sections; risk categories presented as a table (Category | Appetite Position | Tolerance Threshold | Rationale); escalation triggers as a three-tier table - **Length**: 1,100–1,500 words - **Format**: Structured document mixing concise prose (narrative sections) and tables (categories, escalation triggers, metrics) - **Sections**: COSO Foundation & Strategy Linkage → Qualitative Appetite Narrative → Six Risk Categories (table) → Escalation Triggers (table) → Governance & Review → Metrics & Attestation - **Tone**: Executive governance register — precise, board-appropriate, defensible to auditors and regulators; no marketing language, no hedging ## Quality Checklist Before delivering output, verify: - [ ] All six risk categories are present, each with an explicit appetite position AND a quantified tolerance threshold - [ ] The COSO distinction between appetite, tolerance, and capacity is stated and applied (not just named) - [ ] Every escalation tier has a quantified trigger, an accountable role, and a maximum escalation time - [ ] At least one category shows higher governed appetite explicitly enabling a stated strategic priority - [ ] Thresholds tie to the provided regulatory environment (named frameworks appear in the relevant categories) - [ ] Any threshold derived from defaults is flagged as an assumption for board calibration — no fabricated precision presented as fact ## Notes - Risk capacity (viability ceiling) is often omitted from appetite statements and is exactly what regulators probe — always include it for the Financial and Operational Resilience categories. - The strongest statements show appetite *enabling* strategy in at least one category; a document that only restricts will be read as a security wish-list, not a board governance instrument. - Where the organization faces SEC cyber disclosure rules, the Tier 3 escalation window should align to the 4-business-day materiality determination timeline — call this out explicitly. - Recommend the board review thresholds against actual loss/incident data at first renewal; the initial statement is a calibrated starting position, not a permanent fixture. --- ## How to use this skill This file is a Claude Code skill in [Anthropic's standard format](https://docs.anthropic.com/en/docs/claude-code/skills) — markdown with YAML frontmatter at the top. **Installing in Claude Code:** - `~/.claude/skills//SKILL.md` — auto-loads in every session anywhere on your machine (recommended for skills you'll use across multiple projects) - `/.claude/skills//SKILL.md` — auto-loads only when working in that project (recommended for project-specific skills) Restart Claude Code or open a new session to register. **Using in Claude.ai, ChatGPT, Gemini, or other AI tools:** 1. 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