Enterprise Risk Management EACUBO Workshop March 20, 2014 Janice M. Abraham, President & CEO
ERM: A process forward 2
ERM A business process, led by senior leadership, that expands the core concepts of risk management: 1. Identifying risks across the enterprise 2. Assessing the impact of the risks to the plans and mission 3. Developing and testing mitigation plans 4. Monitoring identified risks and consistently scanning for emerging risks ERM: A process forward 3
Roles Senior Administration Owns ERM Department heads involved in operational risks Full Board/Executive Committee Sets tone, addresses strategic and governance risks and fills in gaps Standing Committees Understand programs and risks Audit Committee Owns specific risks and process ERM: A process forward 4
Best Practices Tone at the top matters Champions are essential Understand and embrace specific roles Question sacred cows Understand, respect, and appreciate differences between business and education Incorporate RM into board committees and full board s work Ask questions, require annual updates, establish accountability ERM: A process forward 5
Opportunities for ERM Strategic plan Annual operating plan Major new initiatives New buildings It s a process not a project ERM: A process forward 6
University of Alberta RM process ERM: A process forward 7
University A. Risk Register: 1. Adequacy of financial resources 2. Information technology infrastructure, systems and support 3. Age and condition of facilities and physical plant infrastructure 4. Recruitment and retention of top personnel 5. Individual and institutional conflict of interest, employee misconduct, regulatory non-compliance 6. Execution of Strategic Plan ERM: A process forward 8
University B. Risk Register: 1. Governance 2. Student enrollment 3. Liquidity, debt and reserves 4. Health care costs 5. Management turnover 6. Return on investment in new capital projects and programs 7. Legal/regulatory compliance 8. Information security 9. Disaster recovery and business continuity 10. Potential for fraud and conflicts of interest ERM: A process forward 9
Liberal Arts College Risk Register: 1. Enrollment: Student s perceived return on investment 2. Succession planning for President/Senior staff 3. Facilities: Age and condition not keeping pace with student demand and increase in sciences 4. Health and safety of students focused on alcohol and sexual assault 5. Information technology infrastructure, security and renewal 6. Endowment growth ERM: A process forward 10
University C. Risk Register Strategic Plan implementation Income diversification New initiatives: Research, Accreditation Governance Faculty: Demographics Compliance: Research, Title IX, Clery Athletics: Compliance, funding, injuries ERM: A process forward 11
University B. Risk Assessment ERM: A process forward 12
Strategic: Full Board/Executive Committee Crisis response and BCP Information Technology Reputation and Brand Strategic Planning ERM: A process forward 13
Strategic: Governance/Board Affairs Board performance Conflicts of interest/code of conduct Board and Admin Communications By-laws ERM: A process forward 14
Finance & Land Use Income diversification Debt Conflict of interest Campus master plan Deferred maintenance and life safety Space utilization Total cost of capital projects ERM: A process forward 15
Audit Compliance Coordination of audit plan and gap analysis Whistle blower, fraud and reporting ERM: A process forward 16
Academic Affairs Academic quality Accreditation: New and ongoing programs Blended learning strategy Entrepreneurial ventures Faculty; recruitment, tenure, development Global strategy ERM: A process forward 17
Campus Life: Academic & Student Affairs Admissions, Enrollment, Retention Alcohol and drug use Athletics Campus safety and security: Clery Act, VAWA Sexual Assault/Title IX Experiential Learning Financial aid/student debt Student Health Center and Mental Health ERM: A process forward 18
Research Intellectual property Conflicts of interest Financial sustainability Incubator support ERM: A process forward 19
Development Gift acceptance and use policy and procedures Comprehensive campaign support ERM: A process forward 20
Lessons learned from others: Focus on high-impact risks Focus on mitigation plans Take on the tough issues and sacred cows All risks must have owners It s a process and business tool, not a project ERM: A process forward 21
All information provided is of a general nature and is not intended to address the circumstances of any particular individual or entity. No one should act upon this information without appropriate professional advice after a thorough examination of the facts of the particular situation. Copyright 2013 by United Educators Insurance, a Reciprocal Risk Retention Group. All rights reserved. Contents of this document are for members of United Educators only. Permission to post this document electronically or to reprint must be obtained from United Educators.