Managing risk in the education landscape

When it comes to an institution, the gamut of risk’s definition increases. Be it reputational, technological, business and operating model-led, the increasing categories of risk signal the new normal of perpetual discomfort across the higher education sector.

While uncertainty pervades all aspects of higher education right now (such as virtual learning, remote work, uncertain financial conditions, constrained enrollment), it is inevitable that many colleges and universities will be operating in a very different environment in a post-COVID-19 world.

The higher education sector is experiencing change at an accelerating rate, some of which was already underway since before the pandemic. As a result, an environment of constant change and disruption is creating opportunities as well as leading to a growing array of risks, which can quickly derail the strategy of higher education institutions.

As new risks emerge, institutions can be more aware of the increasingly wide spectrum of threats affecting them and prepare for worst case scenarios to lessen the damage of events that are out of their control.

The fifth session of the Deans Summit Connected explored the case for a Chief Risk Officer (CRO) in Higher Education institutions.

So why do higher education institutions need a CRO?

A lack of a centralized approach to deal with risk, combined with an increase in uncertainty, and complex and interconnected risks, have highlighted the need for a dedicated resource in the higher education institutions.

In that direction, a CRO can serve as a key resource, that can help connect all the dots across the landscape of uncertainty. This will help institutions manage their risk exposure and create institutional value.

With a rapidly changing environment, the need for CROs is now more than ever. Here are 5 reasons why higher education institutions need CROs:

1. Risks to higher education institutions are constantly in flux.
2. Risk management needs to be managed top-down, in addition to managed bottom-up.
3. Risk and compliance need to be appropriately balanced.
4. Risk complexity and the need for action requires risk accountability.
5. Decisions are becoming much more risk-based, especially in a post-COVID world.

In all this, simply appointing a CRO will not be enough. To truly be able to see a difference, in the institution’s approach to risk management, it will be important to give the CRO a seat at the table and the standing to influence major decisions and initiatives.

Thus, we can say that a CRO will serve as both an enabler of strategic objectives and a protector of institutional value.

In summary

It is not that events and crises will not occur, nor is it true that institutions will have answers to all situations and risks they face. There is no doubt that risks will emerge, especially as a result of the pace of change and the resulting uncertainty.

Having a centralized approach to risk management combined with a dedicated resource in the form of a Chief Risk Officer, will help institutions be more aware, proactive and prepared to deal with risks effectively—and this will determine whether the institution will survive or thrive.

To be more resilient in the face of risk, it is time to change the approach to risk management in higher education.

Learn more

Explore the in-depth article on Deloitte Insights to know more about how COVID-19 rattled India’s higher education but also opened myriad opportunities.