In the context of COSO, what does "Performance" refer to?

In the context of the COSO framework, "Performance" refers to the process of prioritizing risks based on the organization's risk appetite. This aspect of performance emphasizes how well an organization can achieve its goals while managing its risk exposure effectively. It aligns strategic objectives with resources and capabilities, enabling a clear assessment of risk tolerance.

Effective performance management requires organizations to evaluate their ability to meet objectives while accounting for the uncertainties and risks they may face. By prioritizing risks according to their appetite, organizations can allocate resources in a manner that maximizes achievement potential while remaining within acceptable risk thresholds. This strategic approach leads to informed decision-making and promotes sustainable organizational success. Hence, the focus on aligning risk management with performance goals makes prioritizing risks based on risk appetite a key element within the "Performance" component of the COSO framework.