Taking a Proactive Approach to Managing Risk
March 21, 2019
Schools, colleges, and universities are increasingly evaluated based on the success of their institutional planning and risk management. From credit rating agencies, school boards, and even parents of students, educational institutions are expected to get ahead of risk. Because of this, more boards, presidents, and heads of school are mandating an institutional or holistic risk management process on their campuses.
And yet, when United Educators polls K-12 schools and higher ed institutions, the overwhelming response is that many of them feel unprepared and do not have an established risk management process that seeks to identify, assess, and treat risks before a major event occurs.
Recent surveys shared that:
- 79 percent of higher ed institutions reported incidents occurring in the last three years that were considered a major reputational risk, but more than half (54 percent) do not believe they have the ability to withstand a major reputational risk event.
- Only 43 percent of independent schools include risk management in their strategic planning documents, while just 15 percent indicated that they maintain a risk register identifying the risks most critical to mission success.
So, what can be done?
For some time, the corporate world, as well as some larger nonprofits, have engaged in a holistic form of risk management known as Enterprise Risk Management (ERM). ERM is a process that engages senior leaders throughout the organization to break down silos and consider risk across all departments, emphasizing a proactive and collaborative approach. This model has made its way into the education space and schools that establish an ERM process often express having peace of mind, knowing that leaders across the institution have proactively discussed a wide range of scenarios, solutions, and responses.
Organizing stakeholders and implementing an ERM program on campus can sound difficult, but don’t get overwhelmed. The key to planning is establishing a sustainable and iterative process that allows your school to identify, assess, and manage risks across the institution.
A sound risk management program will allow you to:
- Improve strategic and legal decision making by providing a robust picture of the internal and external risk environment in which you operate
- Anticipate risks and minimize threats, so you can survive even the worst storms — both the literal and the figurative ones
- Improve your overall institutional performance, enabling you to succeed today and in the future
Holistic risk management is essential to thriving in this changing and challenging environment, and with the right approach, every school and university can do it.
Reputational Risk Toolkit
Enterprise Risk Management: Everyone’s Job