Are our higher educational institutions risk-ready?

In the wake of the COVID pandemic, enterprise risk management (ERM) has gained significance in the global economy as businesses and individuals strive to recover from last year’s worldwide lockdown. Many businesses and organisations have consequently taken proactive measures to risk-proof the entire value chain with risk mitigation and business continuity plans. Yet, one sector which is still crippled by the lack of risk-intelligence is the education sector. Despite recognising the demand for enterprise risk management qualifications and training among its students and faculty, many higher educational institutions are still poorly equipped to handle the emerging challenges and external uncertainties.

Given the role of HEIS in ensuring world-class education for our students, it is necessary that we take immediate measures to address this lacuna. Planned risk management across the enterprise will ensure that these institutions build a robust structure that can help them stay agile in the face of uncertainties such as reputation damage, health and safety, financial, human resources related issues and much more.

State of ERM in HEIS

HEIS have seen a slew of changes last year. The two triggering factors behind these changes were the pandemic and the National Education Policy 2020 (NEP2020). The global pandemic created an unprecedented situation where schools, colleges and HEIS had to quickly adopt online modes of teaching, learning and assessment. With normalcy slowly returning, educational institutions are once again facing uncertain situations like student and staff safety, creating hybrid learning environments, managing cash flows and new admissions.

Unlike the pandemic, NEP2020 was highly anticipated and welcomed across the board. The revolutionary measures in the policy necessitate a deeprooted change in the policies followed by educational institutions. Thus, while the first event created a crisis-like situation that demanded a quick response, the second was a policy framework that set down a roadmap for the much-needed transformation of our educational structure. Together, these events have created a rapidly evolving situation where Indian HEIS must show agility and resilience in adopting new methods of learning even as they ensure operational continuity.

The question that arises, then, is whether our institutions are ready to manage uncertainties and crises. The evidence appears to suggest otherwise.

A survey of higher educational institutions, conducted by the India Regional Group of the IRM in collaboration with the All-india Council for Technical Education (AICTE), found that only 37% of the institutions surveyed had a dedicated risk officer or faculty to advise the school’s leadership team on institutional and enterprisewide risks.

This figure is doubly concerning when one considers that the survey was conducted during the pandemic, and demonstrates the need for immediate reform so that our institutions are prepared for a future crisis. The role of a Chief Risk Officer (CRO) has evolved significantly across the globe, especially in India, with regulators mandating risk committees at Board level in listed companies and financial institutions. Organisations have started setting up dedicated risk functions by hiring IRM qualified professionals who have the expertise and proficiency in managing enterprise-wide risks beyond the traditional insurance and financial risks. Many IRM qualified professionals are even working in the capacity of risk leaders at education institutions globally.

Uncertainties facing the education sector

The pandemic has created a volatile situation that requires a multi-faceted approach by the Indian education sector. Schools, universities, and other HEIS must build resilience with good business continuity practices and implementation of a robust enterprise risk management process.

There have been regulatory initiatives to impose certain risk-mitigating measures. For instance, the University Grants Commission has issued detailed safety guidelines to reduce the risk of COVID spread. Apart from the general SOPS, these guidelines also ask institutions to prepare for risk assessment and subsequent action.

However, we must also recognise other risks that have emerged during the pandemic, disrupting learning and throwing into concern the future of our post-graduate and graduate students. Some of these concerns are:

Ensuring smooth learning to underprivileged students who do not have the means to access online platforms. Creating standards for online proctored exams.

Setting up alternative selection procedures in case Board or competitive exams are delayed.

Synching student intake with delayed result declarations from various state and central boards.

Offsetting revenue from auxiliary sources, such as hostels, canteens, and messes. Providing salaries for employees engaged in services that were halted due to the pandemic, such as hostel staff or bus drivers.

NEP2020 has also thrown up some unique challenges, from wide-ranging changes in curriculum and pedagogy, to ensuring the skilling of teachers, scaling technology adoption, and devising a holistic evaluation infrastructure. These risks are in addition to the uncertainties arising from increasing competition, the emergence of alternative methods of teaching, and increasing scrutiny from regulatory and parental bodies, which range from business / operating model and enrollment supply risks, to reputation and compliance risks.

Need for ERM in HEIS

Given the multiple challenges facing our education sector, we must immediately address the lack of adequate risk-aware measures. Risk management structures have been successfully implemented in HEIS, providing us with insight into successful practices. For instance, a major Australian university carried out an extensive SWOT (Strengths, Weaknesses, Opportunities and Threats) analysis to identify and analyse risks in its daily operations. The result was a well-defined risk framework that included both strategic and operational risks. Since then, other tools have been utilised to assess, calibrate, and standardise risks and their consequences. The assessment can help in prioritising risk management goals.

Enterprise Risk Management (ERM) provides us with methods and processes that can help institutions to manage risks in pursuit of opportunities to meet organisational objectives. An embedded risk structure leads to timely anticipation, identification, assessment, control, and management of emerging uncertainties.

Any risk structure followed by HEIS should ideally include the following measures:

Creating a risk map: An enterprise-wide risk map can play a pivotal role in identifying areas and segments that are susceptible to risks, followed by formulating and enacting by-laws, reforms, and other policy measures to contain these risks. It lays down the procedure for risk reporting and resolution.

Spreading awareness: No

ERM implementation can be successful without diligent follow-up to ensure comprehensive education of employees. AICTE has taken the initiative of preparing technical HEIS to understand and identify the challenges arising from the COVID pandemic to enable an embedded and agile decisionmaking structure.

Developing a risk management framework: This is critical in defining a risk-aware structure with clear guidelines that must be followed when assessing or managing risks. It must be in line with the institute’s objectives and the condition of its assets and resources, including its faculty and students.

Setting up risk management teams: Manned by risk professionals with clearly defined roles and responsibilities, these teams will be responsible for the identification, classification, evaluation, and mitigation of risks. Their role must extend from policy implementation to supervision. Equally important is the process of the nomination, appointment, and accountability of these risk officers.

Monitoring: No risk management structure can be successful without a system for continuous monitoring and supervision. It helps in identifying any loopholes, errors, or omissions in time, allowing us to initiate corrective measures quickly.

Even without the impact of COVID, the higher education landscape in India is faced with disruptions caused by massive transformations brought about by technology, competition from the online education industry, and the wide-ranging NEP2020. Given this rapidly evolving situation, it is imperative that we build an ecosystem of resilience in our HEIS. It will require a conscientious approach towards building embedded risk management that can stay agile and accommodate these emerging developments and meet challenges head-on.

ORGANISATIONS HAVE STARTED SETTING UP DEDICATED RISK FUNCTIONS BY HIRING IRM QUALIFIED PROFESSIONALS