What is Risk Threshold?
A risk threshold is the measurable line drawn from risk appetite — the specific level of exposure above which a risk is unacceptable or must escalate. Appetite is the attitude; threshold is the number.
Thresholds make risk governance objective: instead of debating whether something "feels" serious, the team compares exposure to a pre-agreed limit and acts accordingly.
Worked example
Appetite: "we accept moderate schedule risk." Threshold: "any risk with more than a 15-day potential delay escalates to the steering committee." The threshold is where the appetite becomes a number.