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:
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:
How should a school start implementation of ERM?
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?