Why Independent Schools are Implementing ERM

Risk Management
Share Button

In a recent article from Net Assets by the National Business Officers Association, Janice M. Abraham noted that an increasing number of independent schools are borrowing a page from universities and corporations. Schools are using Enterprise Risk Management (ERM) to help identify risks and take advantage of opportunities.

With so many emerging risks in today’s world, ERM has become a best practice for managing risk at the enterprise-wide level. There are many short- and long-term benefits to implementing effective ERM at a school. An ERM implementation can:

  • Help prioritize where to invest limited resources
  • Inform and aid with timely decision-making
  • Aid in awareness of emerging risks
  • Assist in achieving strategic objectives
  • Improve succession management – enhanced human capital

Do you know where a school faces the greatest risks and how leadership teams currently address them? Some of the most common risks schools face are:

  • Poor crisis planning
  • Privacy management and information security
  • Social media snafus
  • Economic conditions
  • Conduct risk/organizational culture
  • Employment practices
  • Field trips/foreign travel
  • Fraud
  • Loyalty and retention of teachers/student families
  • Conflict on the board and lack of long-term strategy

How should a school start implementation of ERM? 

  • Conduct risk surveys to identify risks
  • Benchmark against other schools
  • Rank the enterprise-wide risk assessment of the school (address all risks)
  • Gain accountability and ownership from administration and staff
  • Form a risk council and sub committees such as safety committees
  • Develop a written program and action plan

For more information on ERM, please read the Committee of Sponsoring Organizations of the Treadway Commission (COSO) guidance. In 2004, the COSO Board commissioned and published 2004 Enterprise Risk Management — Integrated Framework, this publication has gained broad acceptance by organizations in their efforts to manage risk. Last year, COSO issued an update to their 2004 ERM framework that is still out for public exposure and comment, check it out here.

COSO’s overall plan appears to bring the basic framework more up-to-date by aligning ERM with an organization’s strategic plan. COSO emphasizes that ERM can and should be used by organizations of any size with a mission, strategy, and objectives, as well as the need to make decisions under uncertainty.

Want to start ERM at your school?

For more information, please contact Aronson Nonprofit and Industry Association Group Manager Melissa Musser, CPA, CISA, at mmusser@aronsonllc.com or 240.364.2598.

About Melissa Musser

has written 6 post in this blog.

Melissa Musser currently serves as a Manager in Aronson’s Nonprofit & Association Services Group, with 15 years professional experience, including eight years of public accounting with both a regional and Big Four firm. Her professional experience includes five years as a manager of corporate and IT internal audit where she has implemented major transformation initiatives, such as COSO 2013, data analytics, shared service centers and information security. Melissa specializes in providing assurance and consulting services for associations, faith based organizations, independent schools, and other nonprofit service organizations.

Comments are closed.

View Archives

Subscribe to Blog via Email

Enter your email address to subscribe to this blog and receive notifications of new posts by email.

Join 12 other subscribers

Latest Webinar Videos