1. Getting Started on Enterprise Risk Management
Janice M. Abraham, President & CEO

2. Why Enterprise Risk Management (ERM)?
Sustainability
Preparedness
Strategic planning
Internal controls
Mission
Peace of mind
ERM for Independent Schools

3. What is ERM?
A collaborative process, led by senior leadership, that extends the concept of traditional risk management:
Identifying risks across the entire institution
Assessing the impact of risks to the operations and mission
Planning and practicing response or mitigation
Monitoring the identified risks, holding risk owners accountable, and regularly scanning for emerging risks
ERM for Independent Schools

4. The ERM Process Call to Action Risk Identification Risk Assessment
Mitigation Planning
Report and Monitor
ERM for Independent Schools

5. The ERM Process Call to Action Risk Identification Risk Assessment
Mitigation Planning
Report and Monitor
ERM for Independent Schools

6. Key Players Board of Trustees Senior Leadership Risk Management
Audit Committee, Standing Committees
Senior Leadership
Head of School
Business Officer
Risk Management
Risk Manager, Risk Owners
Risk Committee
ERM for Independent Schools

7. Step 1: Call to Action Communicate Key Roles Commitment to process
Importance to institution
Enlist support and participation
Key Roles
Board
Head of School
Call to Action
Risk Identification
Risk Assessment
Mitigation Planning
Report and Monitor
ERM for Independent Schools

8. Step 2: Risk Identification
Focus and scope
Ongoing process
1st – Priority or known risks
2nd – Expand to more risks
Key Roles
Business Officer
Senior leaders
Call to Action
Risk Identification
Risk Assessment
Mitigation Planning
Report and Monitor
ERM for Independent Schools

9. Sample Risk Register IT infrastructure and security
Abuse of students/ interactions with adults
Crisis management
Employment practices
Facilities/deferred maintenance
Health center
IT infrastructure and security
International students
School security
Shifting demographics
Study abroad programs
ERM for Independent Schools

10. School Risk Register
Operational Risk – Decreasing enrollment (local, Out-of-State, and International) and increasing number of cochlear implanted children whose parents opt for an oral education.
Financial Risk – Reduced number of students and increased per capita share of appropriations that exceed tuition rates to "Out of State" and "International Students,” creating a continued net operating deficit in the Core program.
Reputational Risk – Perceived as a school for children with additional disabilities/deafness (and the impact on parents of deaf children and LEAs) and/or as a "Signing School" only (not able to address learning and communication needs of deaf, hard of hearing, and implanted students).
Political Risk – Legislative Relations: Changes in administration that has been supportive to school and challenge of policy makers understanding the deafness and service delivery platforms impacting the Core program’s sustainability.
Hazard Risk - School Security and Student Health/Safety
Risk Management: A Framework

11. Step 3: Risk Assessment Evaluate Prioritize Key Roles Likelihood
Impact
Optional – velocity
Prioritize
Risk scoring
Key Roles
Business officer
Senior leaders
Risk management
Call to Action
Risk Identification
Risk Assessment
Mitigation Planning
Report and Monitor
ERM for Independent Schools

12. Sample Heat Map Independent School Risks Abuse of students
Crisis management
Employment practices
Facilities management
Health center
IT security
International students
School security
Shifting demographics
Study abroad programs 9 1 5 2 6 7 3 10 4
IMPACT 8
LIKELIHOOD
ERM for Independent Schools

13. ASD Independent School Heat Map2 5 1 3 4
Decreasing enrollment/ increasing cochlear implants 
Reduced CT students
Perception of ASD 
Legislative Relations 
ASD Security/Student Health/ Safety I M P A C T
L I K E L I H O O D

14. Risk Scoring Rubric x = TOTAL RISK SCORE ERM for Independent Schools
IMPACT
1-2 Insignificant/Mid
3 Moderate
4-5 Significant/Catastrophic
Minimal impact on annual operations, reputation or financial condition.
Could delay plans in place, short-term programs affected, and require moderate management effort; 1-6 months’ recovery.
Long-term and significant effect on ability to recruit students, faculty, financial support; material breach of confidence & reputation. x
LIKELIHOOD
1-2 Unlikely
3 More Likely
4-5 High Probability
Unlikely to happen in the near future and no immediate action is needed.
More an likely to occur and management should begin to mitigate.
High probability event/risk will occur within a year; immediate action plans needed. =
TOTAL RISK SCORE
ERM for Independent Schools

15. Step 4: Mitigation Planning
Develop plan
Ownership
Subject matter expertise
Milestones and timetable
Key Roles
Senior leaders
Risk owners/ experts
Call to Action
Risk Identification
Risk Assessment
Mitigation Planning
Report and Monitor
ERM for Independent Schools

16. Developing a Mitigation Plan
Remember the 80/20 Rule
Overall RM Strategy
Risk appetite and tolerance
Accept, reject, transfer/share, manage
Planning Tools
Policy and procedures
Resources – staff, budget, outside experts
Practices – education, coordination, practice, reporting, response
ERM for Independent Schools

17. Sample: Crisis Management
Risk Owner/Partner: Head’s Cabinet/Safety Committee
Board Committees: Full Board
Description:
Despite past investments in emergency response, the school is concerned about complacency and its affect on overall readiness to effectively execute CR&M plan in a real emergency. Mitigation plan is intended to re-energize past efforts.
Risk Score/Tolerance: 12/3
Goal: 8/2
Treatment:
Fill new Facilities position with “emergency manager” responsibilities
Reestablish Safety Committee with a clear mandate to strengthen crisis response and management
Update and disseminate revised Emergency Operations Plan
Drill institutional staff in notification, lockdown and evacuation procedures
ERM for Independent Schools

18. Step 5: Report and Monitor
Report to board
Top 5 to 10 risks
Approach with other risks
Monitor and scan
Key Roles
Board/Assigned Committees
Head of School
Business Officer
Call to Action
Risk Identification
Risk Assessment
Mitigation Planning
Report and Monitor
ERM for Independent Schools

19. Consider Scope Carefully
ERM Implementation
Consider Scope Carefully
Available risk management resources
Leadership, dedicated staff, committees, risk owners
Scope of the effort
Comprehensive or incremental
Implementation approach
Systematic or priority driven
ERM for Independent Schools

20. Implementation Approaches
Systematic
Top Down
Bottom Up
Strategic
Financial
Compliance
Operational
ERM for Independent Schools

21. Implementation Approaches
Priority Driven
Hybrid
Strategic
Financial
Compliance
Operational
ERM for Independent Schools

22. Implementation Approaches
Priority Driven
Hybrid
Strategic
Financial
Compliance
Operational
ERM for Independent Schools

23. Linking efforts to strategic plan Establish a discipline
Common Good Practices
Tone at the top
Linking efforts to strategic plan
Establish a discipline
Focus on high-impact risks
Question sacred cows
Focus on mitigation planning
ERM for Independent Schools

24. Micromanagement by board ERM as a project
Common Pitfalls
Scope or mission creep
Micromanagement by board
ERM as a project
Overemphasis on risk identification
Exposure to potential liability
ERM for Independent Schools

25. Stay Connected bit.ly/UELinkedIn @UnitedEducators bit.ly/UEYouTube
Janice Abraham
President & CEO____
7700 Wisconsin Avenue, Suite 500 Bethesda, MD Office: (301) Direct: (301)
bit.ly/UELinkedIn
@UnitedEducators
bit.ly/UEYouTube