There are several reasons why some risks may be considered acceptable:

$1.$ Cost$-$benefit analysis

Some risks have associated benefits that outweigh the potential negative consequences. Organizations may accept certain risks if the potential rewards or advantages justify taking them. For example, a company may accept the risk of a new product launch failure if the potential profits from a successful launch are highly attractive.

$2.$ Low probability and$/$or low impact

If a risk has an extremely low probability of occurring and$/$or the potential impact is negligible or insignificant, the organization may decide to accept that risk rather than allocate resources to mitigate it$.$ Risks in the low probability or low impact zones of a risk matrix are often deemed acceptable.

$3.$ Inability to fully mitigate

In some cases, it may be impossible or prohibitively expensive to completely eliminate a risk. The organization may then accept the residual risk after implementing reasonable mitigation measures. For example, the risk of natural disasters can rarely be eliminated entirely.

$4.$ Core business necessity

Certain inherent risks are unavoidable for an organization to operate and achieve its objectives. These risks are accepted as a necessary part of doing business in that particular industry or domain. For example, airlines accept certain safety risks associated with air travel.

$5.$ Risk appetite and tolerance

Every organization has a defined risk appetite the amount of risk it is willing to accept in pursuit of its objectives. Some risks that fall within the acceptable range may be considered acceptable.

Ultimately, the decision to accept risks involves carefully evaluating the potential benefits versus the risk exposure and aligning the risk with the organization's overall risk management strategy, culture, and tolerance levels. Accepted risks are typically monitored and controlled within defined thresholds.

The decision to determine which risks are acceptable within an organization should be a collaborative effort involving multiple stakeholders and governed by a formal risk management framework. Here are some key individuals or groups who should be authorized to evaluate and approve acceptable risk levels:

$1.$ Board of Directors$/$Governing Body:

The board sets the overall risk appetite and tolerance levels for the organization. They provide strategic oversight and approve the enterprise risk management policy and philosophy.

$2.$ Chief Risk Officer $($CRO$)$ or Risk Committee:

The CRO or a designated risk management committee should consist of senior executives or risk experts who establish risk assessment criteria, methodologies, and reporting mechanisms. They coordinate risk evaluations across different functions.

$3.$ Senior Management$/$Executive Team:

C$-$suite executives from core business units $($CEO$,$ CFO, COO, etc.$)$ need to be involved in determining acceptable risks specific to their areas, as they have operational context and accountability.

$4.$ Risk Owners$/$Function Heads:

Department heads or process owners who are closest to the risks can provide substantive input on probability and impact assessments and recommend mitigation or acceptance based on costs and benefits.

$5.$ Subject Matter Experts:

Technical experts, field operators, legal$/$compliance specialists, etc. can lend their domain knowledge to properly evaluate risks in their areas of expertise.

For example, the IT leadership may determine cyber risks within their risk appetite by balancing investment costs against data protection needs. The engineering team may propose accepting certain safety risks that meet regulatory thresholds for new product designs to enable innovation. Such evaluations are then reviewed by the risk committee and senior management before the board approves the overarching risk acceptance criteria.

By involving this cross$-$functional group of stakeholders, organizations can ensure risks are comprehensively evaluated through multiple lenses before determining their acceptability in alignment with the organization's strategic objectives and risk resilience.

There are certain vulnerabilities that are inherent or unavoidable for organizations due to various factors. Here are some examples of such unavoidable vulnerabilities:

$1.$ Human Factors:

Despite training and controls, humans are prone to making errors, being influenced by social engineering tactics, or acting with malicious intent. Employee mistakes, negligence, or insider threats can introduce vulnerabilities that are difficult to eliminate entirely.

$2.$ Third$-$Party Dependencies:

Organizations often rely on external vendors, suppliers, or service providers for critical functions or components. Any vulnerabilities in these third$-$party systems or products can create residual risks that are out of the organization's direct control.

$3.$ Legacy Systems:

Many organizations continue to use legacy systems or outdated software due