Over-Exposed Zone

The area of the Appetite Alignment Matrix where risk exposure exceeds risk appetite. Organizations operating in this zone are taking more risk than they have deemed acceptable, potentially exposing themselves to losses beyond their capacity to absorb. The over-exposed zone signals the need for risk reduction measures, which might include strengthening controls, transferring risk through insurance or outsourcing, avoiding certain activities entirely, or reconsidering strategic objectives. Addressing over-exposure typically requires immediate attention from management.