A Wake-up Call: Enterprise Risk Management (ERM) at Colleges and Universities Today

May 2014 | 0 Comments  Average 2 out of 5

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Findings from a recently published survey conducted by the Association of Governing Boards of Universities and Colleges (AGB) and United Educators (UE) indicate that higher education institutions continue to consider risk on a largely ad hoc basis. While demonstrating a modest increase in the use of risk assessment in high-level decision making over the past five years, boards and administrators are not yet substantially committed to enterprise risk management (ERM), which offers an approach for assessing and addressing threats and seizing opportunities.

ERM is defined in the study as a business process led by senior leadership that extends the concepts of risk management and includes:

  • Identifying risks across the entire enterprise
  • Assessing the impact of risks to the operations and mission
  • Developing and practicing response or mitigation plans
  • Monitoring the identified risks, holding the risk owner accountable, and consistently scanning for emerging risks.

Results were analyzed and compared to a similar study conducted in 2008. A comparative analysis suggests that higher education is conflicted when it comes to ERM, despite having just come through a five-year period of momentous risks.

Key findings from the study include:

  • Only 25 percent of those surveyed strongly agree that the institution is doing a good job identifying, assessing, and planning for institutional risk
  • 62 percent of respondents have full board discussion on institutional risk. Discussions have increased since 2008 when 47% reported having full board discussions
  • 39 percent of respondents say their institution has conducted an ERM process in the last two years

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