Risk Management |
Article by Simon Parker, Ashbury College
From the May/June 2019 Net Assets magazine
In March, I attended the NBOA Annual Meeting in San Diego. One of my personal goals was to meet other risk managers and establish a network for risk management. Although I met one or two people who are responsible for safety or security, I quickly realized that few independent schools seem to have a single person dedicated solely to risk management broadly. For the most part, it appears that risk management is typically assigned as a secondary or tertiary responsibility to positions such as the chief financial officer, director of school operations or some other similarly busy position within school leadership. Risk is not their primary responsibility, meaning it can sometimes take a back seat in the course of normal duties.
Despite these realizations, almost everyone I spoke with at the conference agreed that risk management in schools today is extremely important — so important, in fact, that schools are devoting more and more resources toward managing risk and risk-related activities.
If we believe that risk management is important, and we are devoting resources to the topic, why are there not more people within independent schools dedicated solely to risk?
There are many answers to this question, all valid. Many schools just do not have the financial or human resources to dedicate a single person to managing risk. School size and complexity also play a part: A small day school may not need a dedicated risk manager, whereas a larger, well established school incorporating more complex elements (such as day, boarding, homestay and international travel) may see risk differently. Attitudes toward risk also play a part. At the NBOA conference, I developed a perception that some schools approach risk management from a more traditional lens. In these cases, risk is the purview of financial and legal experts, and all risk falls neatly into categories such as financial, liability, property or human resources. This approach tends to exclude issues such as behavioral, cyber and travel as belonging to the safety and security portfolio.
Given the inherent complexity in independent school operations, perhaps schools should consider a new paradigm in which risk encompasses many more issues.
I suggest that independent schools embrace a proactive risk management approach that both maintains the safety and security of staff and students while securing the assets and resources of the school more broadly. A successful program includes thoughtful and strategic planning, considering all possible and relevant factors. More importantly, it assigns the necessary resources, including for personnel. Through the dedicated efforts of one or more staff members assigned specifically to risk, you can be assured that the right individual will be best positioned to undertake a proactive approach. In contrast, an individual assigned risk as a secondary task may not be well situated to react proactively, and very possibly in fact may react to risk and crisis.
What are the benefits of having a risk manager? The risk manager becomes the school’s champion for all things risk-related. When risk is centralized with one office, the risk manager can break down silos of expertise and provide the cross-functional coordination and collaboration needed to adequately address risk. (Many risk issues touch different school departments.) Small projects can be implemented quickly by a dedicated risk team, allowing management to focus on the larger issues. Time and resources devoted to risk can be minimized, rather than spread across the entire organization. Examples from higher education and the private sector also show that risk management departments identify risks, develop strategies to protect against risks, oversee the execution of those strategies, and coordinate and motivate colleagues to adopt the strategies. In fact, one just needs to look to colleges and universities to see that risk management has a very important seat at the table.
For independent schools specifically, designating a risk manager to apply a thoughtful and proactive approach to managing risk frees the school’s leadership team to focus their efforts on the school’s strategic objectives, such as the well-being and development of students and staff. An effective risk manager can also reduce disruptions and dislocations that could hinder the delivery of educational effects, harm the reputation of the school, contribute to lost time and resources, increase stress and negativity derived from moving from crisis to crisis, and raise the spectre of legal repercussions.
What roles and responsibilities might a dedicated risk manager take on at an independent school? This person could directly advise and assist the leadership team and board of trustees in creating strategic, practical and effective processes to minimize organizational risks. Reporting to the CFO, the risk manager could assist in enhancing the school’s culture of delivering effective, safe education and character-development programs. From the strategic to the tactical level, the risk manager might also undertake specific activities that protect students, faculty and staff, contractors, volunteers, and real and virtual property, including:
For some independent schools, centralizing the responsibility for risk into one person or office might go against school culture. However, given the continuously emerging risks in our evolving school operating environment, it might be prudent for schools to revisit their organizational structure, consider this new paradigm, and carve out the resources to add this key position.
Download a PDF of this article.#RiskManagement
A Delicate Balance: Should You Hire a Dedicated Risk Management Officer? (July/August 2016)
Risk & Compliance: Jump-Starting Enterprise Risk Management (January/February 2019)
ERM: Everybody is a Risk Manager (July/August 2017)
No Strangers to Danger: ERM for Every School (July/August 2018)
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