ERM in industry and academia assignment

Chapter 9

Lessons from the Academy: ERM Implementation in the University Setting

Introduction

• Higher education environment • ERM in higher education • Adopting ERM in Colleges and Universities • The University of Washington case study • Summary

Higher Education Environment

• Generally considered “different” from enterprises • Historically separate from targets of legislation • Often, success may lead to lack of risk management • Multiple high-visibility scandals have shed light on HE • Many HEIs have migrated to more corporate ERM • Different HE cultures demand different ERM solutions

ERM in Higher Education • Recognition of institutional areas

• Each encounters unique risks

• Risks can include

• Litigation settlements

• Loss • Assets

• Enrollment • Donors

• Reputation damage

Adopting ERM in Colleges and Universities

• Think tank of HE to discuss ERM in HE • 2001

• PricewaterhousCoopers • National Assoc of College and Univ Bus Officers (NAUCUBO)

• Focus

· Definition of risk

· Risk drivers in HE

· Implementation of risk management to assess, manage, monitor

risk

· Proactively engage the campus community

University of Washington • Sentinel event

• $35 million fine for Medicare and Medicaid overbilling • Push to implement ERM to improve compliance

• UW is built on a decentralized governance model

• Started with

• Strategic Risk Initiative Review Committee (SRIRC)

• Each initiative asked • Does this proposal add value? • What obstacles are apparent and how can they be addressed? • How can this proposal be improved?

University of Washington, cont’d.

• Committee recommendation

• Create a Culture-Specific ERM • Examined other HEIs

UW Evolution of ERM

UW ERM Structure

UW’s ERM Integrated Framework

UW’s ERM Process

UW’s Risk Assessment: Likelihood and Impact

Summary • Outcomes are consistent with guidance offered by

• National Association of College and University Attorneys (NACUA)

• NACUA eight critical factors • Establish the right vision and realistic plan • Obtain senior leadership buy0in and direction • Align with mission and strategic direction • Attack silos at the outset • Set objectives and performance indicators • Stay focused on results • Communicate vision and key outcomes • Develop a sustainable process versus a one-time project