1. Reputational Risk in Higher Ed: More Talk Than Action?
March 14, 2018

2. Kimberly M. Goff-Crews, JD
Today’s Speakers
Janice M. Abraham
Kimberly M. Goff-Crews, JD
Paul Walker, PhD, CPA
President & CEO
Secretary and Vice President for Student Life
Executive Director, Center for Excellence in ERM
United Educators
Yale University
St. John’s University
ERM and Reputational Risk

3. Agenda Introduction The State of Enterprise Risk Management
Keys to Successful ERM
Reputational Risk on Campus
Reputational Risks in Student Life
Building Your ERM Processes
How to Protect Your Reputation
ERM and Reputational Risk

4. ERM/Reputational Risk Report
ERM and Reputational Risk

5. Research Process Respondents represented these roles on campus:
Survey administered by the Association of Governing Boards of Colleges and Universities in February 2017
Respondents represented these roles on campus:
ERM and Reputational Risk

6. The State of Enterprise Risk Management (ERM)
NYSE listing requirements
SEC rules (item 1a, 302, 404, )
SEC National Exam Priority
Dodd-Frank Act
ORSA
OMB A-123
Court cases
Rating agencies
Every major economy has walked down this path
ERM and Reputational Risk

7. Swans, ERM, and a Core Competency
White Swans – risks you must see
Grey Swans – risks you should see
Black Swans – risks you could not see
White, grey, or black?
Stakeholders might forgive black swans
Stakeholders might not forgive the white and grey swans because…
it signals lack of management/risk competence and poor board risk oversight
ERM and Reputational Risk

8. ERM on Campus: Signs of Progress
70%
of respondents reported having a formal ERM structure and process in place (up from 33% in a similar 2013 survey)
14%
believe the process is effective
ERM and Reputational Risk

9. Board Engagement in ERM
“We need to formalize our ERM and highlight it often.”
“We are just beginning, just getting it off the ground, the momentum is starting to pick up….”
2017 AGB/UE Survey: Board Chairs, Presidents, CFOs, GC
ERM and Reputational Risk

10. Keys to Successful ERM
Create a structure that gets the right information to the right people at the right levels.
Ensure that everyone knows what the key issues are and what is expected.
ERM and Reputational Risk

11. Keys to Successful ERM: Culture and Engagement
Communicate the mission, core values and guiding principles of the institution
Encourage and reward a culture of ongoing improvement and assessment to meet the mission
ERM and Reputational Risk

12. Keys to Successful ERM: Focus and Transparency
Focus your efforts “High and to the Right”
Vancouver Island University
Be transparent: communicate, coordinate … and communicate again.
ERM and Reputational Risk

13. Reputation Risk Is Ascending: Strongly Agree
Reputation risk is more important than three years ago
My institution has identified drivers of reputation risk
A reputation risk plan and response are in place
Response to reputation risk is consistently proactive
83%
78%
67%
26%
ERM and Reputational Risk

14. Incidents Threatening Reputation
62%
had one major reputation event
14%
had 4 – 6 major events
49%
had major event that didn’t become public
ERM and Reputational Risk

15. Knowing Is Not Planning
26%
Reputational risk plan is consistently proactive
54%
Don’t believe they have ability to withstand major reputational risk event
ERM and Reputational Risk

16. Top Risks: Past and Future
ERM and Reputational Risk

17. Reputational Risks in Student Life
Risk registers: student activities are “high and to the right”
Pervasiveness of social media increases risk and speed of impact
Decision-making must be based on mission and values
ERM and Reputational Risk

18. Student Life: Top Risks
Sexual Assault/Title IX continues to be key risk
Prevention and response strategies to sexual misconduct
Shifting regulations from OCR
Public perception
Student Behaviors
Mental health
Alcohol and other drug use prevention and response strategies
Student organizations
General campus safety
Athletics
Safety of athletes; coach and student behavior
Campus Climate
Diversity and inclusion of faculty, students, and staff; discussion of controversial topics
ERM and Reputational Risk

19. Campus Climate and Controversial Speakers
Free Speech Controversy At SMU Makes National Headlines
- CBSDFW, August 2017
“White Privilege Seminar” sparks some controversy on ND campus
– WNDU, December 2014
The real issue in the campus speech debate: The university is under assault – Washington Post, August 2017
ERM and Reputational Risk

20. Controversial Speakers: Key Risk Mitigation Strategies
Establish rapport with a wide range of students at all times
Communicate principles of freedom of expression, academic freedom, and diversity and inclusion
Ensure that key policy and protocol is in place
Develop communications protocol
Invest in continuous training
ERM and Reputational Risk

21. Building Your ERM Processes
ERM and Reputational Risk

22. The new Framework adopts a components and principles structure.
ERM and Reputational Risk

23. --Chronicle of Higher Education, 3/20/17
The Non-Value Obvious
“The board’s post-mortem is just one more way in which the Sandusky scandal continues to divide the university’s leads and to consume time, energy and emotion.” says Robert Capretto, a Penn State University trustee. “It wears on you, I’m tough, but if I told you it didn’t wear on you, I’d be lying.”
--Chronicle of Higher Education, 3/20/17
ERM and Reputational Risk

24. But does ERM work? Add value?
The Value Question
But does ERM work? Add value?
Higher performing institutions are more likely to:
Have a formal ERM
Assign adequate resources to manage reputation risk
Know when a reputation risk event has occurred
Have a better reputation
ERM and Reputational Risk

25. How to Protect Your Reputation
Develop a common understanding of the institution’s reputation
Assess and strive to steadily improve the culture
Identify ownership and lines of communications for specific reputational risks
Pay attention to sacred cows
Manage reputational and other risks in a portfolio and understand how the risks are connected
Share the risk register and mitigation plans regularly with the board
Establish a monitoring system that will give early warning of emerging reputational damage
ERM and Reputational Risk

26. Questions?
ERM and Reputational Risk

27. Stay Connected
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@UnitedEducators
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