Risk Management: Ensemble Performance

By William G. Shenkir and Paul L. Walker, this is one of two related articles in the December issue of Business Officer:

Enterprise risk management orchestrates an approach that includes all areas on campus. Together, rather than solo, leaders evaluate and plan for the impact that unexpected events might have on the institution’s objectives.

In today's uncertain world, college and university leaders must deal with complex risks that can potentially have substantial effects on an institution. Safety and security, natural disasters, and conflicts of interest are some of the more well-known areas, but risk is inherent in many other decisions made on campus. Academic leaders need to be aware of the hazards facing the institution's programs and operations; they also need information about the potential risks embedded in opportunities that may present themselves.

In the private sector, many businesses are implementing a relatively new approach to managing risk: enterprise risk management. This article highlights the major elements of ERM and relates the process to decision making in academia.