The
Chancellor's Initiative Aimed at
Assessing and Managing Risk and Opportunity
The
environment in which higher educational institutions operate has
changed dramatically within the past 10 years, and these institutions
now face new and growing challenges. Every day, campuses struggle
with the effects of diminishing resources and conflicting public
expectations. Managing the reality of these growing and new challenges
requires focused strategies and the ability to manage continuously
increasing competition, change, and risk. To guide colleges and
universities through this complex set of new realities, it is critical
to understand and embrace the institutional risks that accompany
a changing business environment.
The
Evolution of Risk Management
Risk
management has evolved from insurance buying when methods other
than insurance buying began to be used to treat risk exposures.
Originally the scope of risk management was narrowly defined to
include only accidents that resulted in a loss. In the 1980's, as
sophisticated risk financing became an important alternative to
insurance, risk management expanded to include other risk transfer
and risk control strategies.
The
evolution continues as the focus of traditional risk management
expands into enterprise risk management (ERM), an integrated comprehensive
approach to addressing risks that may threaten the achievement of
an organization's strategic objectives. The ERM framework enables
management, working without silos, to collaboratively identify,
assess, and manage future risks and opportunities, individually
and across the organization.
Maricopa
Integrated Risk Assessment
The
Maricopa Integrated Risk Assessment (MIRA) project embraces this
wider view of risk. MIRA blends concepts from both traditional risk
management and enterprise risk management into a comprehensive risk
management program.
In
March 2000, our Governing Board, with support from the chancellor
and the Chancellor's Executive Council (CEC), approved the MIRA
project as an initiative to embed ongoing risk assessment and management
into MCCCD's daily operations and culture. The CEC reaffirmed its
support and commitment in July 2003. In October 2003, Dr. Rufus
Glasper assigned responsibility for the MIRA project to the MCCCD
Risk Manager and asked that she develop and initiate a multi-year
implementation plan. (The implementation plan will be discussed
in the next issue of In Brief.)
MIRA's
Goals
Dr. Glasper established the following goals for MIRA:
- Increased
overall effectiveness and accountability.
- Sound
business process; greater assurance of business continuity.
- Clear
demonstrated compliance with the applicable
laws and regulations.
- Enhanced
employee empowerment and pride.
- Reinforcement
of the strong cultural identity.
- Enhanced
competitive advantage.
In
order to attain the highest probability of success in implementing
ERM, the following must be present:
- Top-level
support, commitment, and participation;
- Adequate
breadth and depth for participation within the organization;
- The
process of risk assessment must become instititutionalized so
that the entire institution becomes involved and has ownership
of the outcomes within the organization;
- Understanding
that ERM is a continuous process, not a one-time event.
We
stand to be among an elite group of higher education institutions
in our efforts to break down the limitations of the "silo approach"
to managing risks by integrating traditional risk management and
ERM. By embedding risk assessment and risk management into our daily
operations, we will minimize surprises, maximize our opportunities
and be more responsive to the ever changing needs of the students
and communities we serve.
Published
in the Summer 2004 Edition of In Brief
|
