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About a year ago I was paging through a report prepared for our college by a group of leading risk-management consultants. Illustrated with brightly colored heat maps and tables, the report’s conclusions looked fairly reasonable. But then I reached a chart titled “Reputation Risk.” Tucked among the factors that contribute to reputation, listed only after “branding” and “community relations,” was the phrase “academic excellence.”
As a longtime faculty member and dean of the college, I reacted strongly. Academic excellence, I thought, deserved more than this supporting role. For your typical manufactured product, its quality may be adjusted to optimize reputation with customers (and thus profits). But academic excellence? That’s the ultimate goal. It’s what we should most fear putting at risk.
At the end of June, I would complete my term as dean. As my thoughts kept turning to risk and liberal education, I talked with the president. We agreed that as a transitional step before returning to teach, I could spend one year conducting a risk project. Some of its goals are specific to our campus, but more broadly it’s a labor of translation. Why would that be needed?
The Language of Risk
Corporate jargon may help explain why campuswide awareness of risk has not fully taken hold at many academic institutions. Deans, presidents, and faculty leaders can find the framework of Enterprise Risk Management, commonly known as ERM, alienating. The talk of suppliers, products, deliverables, and profits is not our language.
Risk management was born to protect the bottom line of corporations. (Success has been mixed, but that’s a different story.) For the past 10 years or so, financial consultants offering risk services have tried to expand into the higher education market. While it’s hard to reject the pitch that “nonprofits face risks, too,” one could also argue academe is sufficiently different from the corporate world that frameworks like ERM will require at least a translation — and perhaps deeper revision — before they can serve us well.
Taking Risk Campuswide
In many ways my transition feels natural. For five years I was second to the president, serving as vice president for academic affairs. I helped to confront the risks that typically face a college, from anticipating a flu pandemic to deciding whether to shut down during a blizzard; from the agonies of the recession to nervous reports of little brown bats winging through the chapel. I’m well-prepared to step back and evaluate how our college responds to risk. Yet to my knowledge, this particular administrative move is unprecedented.
At most places — as I know from recently attending the national meeting of URMIA, the University Risk Management and Insurance Association — risk management lives in the treasurer’s office. Risk managers may have a background in environmental health and safety or human resources; often their primary training is in insurance. Regardless of specific professional field, college risk managers are likely to have broad responsibilities, from regulatory compliance to decisions about campus events, and from employee training to coverage for student travel abroad. Groups of universities have formed organizations like United Educators and EIIA (Educational & Institutional Insurance Administrators) to offer insurance and other risk services.
The risk managers at the conference were forthcoming and curious. My status as a faculty member was more interesting to them than my recent deanship. They told me that they wish professors understood more about how risk works. The risk managers want to be perceived less as naysayers and obstructionists, and more as a resource to keep activities safe and legal. They don’t want to shut down study abroad, but they want to be sure the college has a plan for evacuation in the event of national crisis or natural disaster. From where they sit in the finance office, it’s not easy to have this conversation with the faculty.
As we talk, it’s clear the risk managers recognize that for colleges and universities the real bottom line is the institution’s mission: to teach and conduct research. Threats to the mission are, for us all, the ultimate risk. And since no one knows more about teaching and scholarship than they do, the faculty is the proper guardian of college mission. I now start to understand that purposeful risk engagement could help colleges take a fresh look at shared governance.
Risk and Governance
Faculty leaders, whether as champions or critics of a proposed initiative, are all too familiar with hearing about risk from administrators, legal counsel, and even from board members. Fiduciary risk, compliance risk, liability: We’ve all seen the risk card shut a conversation down.
But once they are fluent in risk, academic leaders will contribute more effectively. They can evaluate and speak to risk in the special context of a college’s mission. As any risk manager will tell you, risk can be positive or negative. The uncertainty at hand may represent an awesome academic opportunity, or may threaten what the institution stands for. Shared governance will work better when we succeed in having all the relevant dimensions of risk — including the ultimate risk, to institutional mission — fully voiced and appropriately weighed.
