Erm adoption and implementation in the higher education environment

Chapter 6 presented the approach the LEGO Group used to implement ERM, and chapter 9 presented a discussion and case study on implementing ERM in a higher education environment. Please explain how ERM adoption and implementation in the higher education (HE) environment differs from the for-profit environment. Cite specific examples from this week’s readings.

To complete this assignment, you must do the following:

A) Create a new thread. As indicated above, explain how ERM adoption and implementation in the higher education (HE) environment differs from the for-profit environment. Cite specific examples from this week’s readings. In your explanation, discuss at least three points or aspects in which the implementing ERM in the two environments differ.

B) Select AT LEAST 3 other students' threads and post substantive comments on those threads, evaluating the pros and cons of that student’s recommendations. Your comments should extend the conversation started with the thread.

ITS 835 ENTERPRISE RISK MANAGEMENT CHAPTER 9 LESSONS FROM THE ACADEMY: ERM IMPLEMENTATION IN THE UNIVERSITY SETTING UNIVERSITY OF CUMBERLANDS 1 INTRODUCTION  Higher education environment  ERM in higher education  Adopting ERM in Colleges and Universities  The University of Washington case study  Summary UNIVERSITY OF CUMBERLANDS 2 HIGHER EDUCATION ENVIRONMENT  Generally considered “different” from enterprises  Historically separate from targets of legislation  Often, success may lead to lack of risk management  Multiple high-visibility scandals have shed light on HE  Many HEIs have migrated to more corporate ERM  Different HE cultures demand different ERM solution UNIVERSITY OF CUMBERLANDS 3 ERM IN HIGHER EDUCATION  Recognition of institutional areas  Each encounters unique risks  Risks can include  Litigation settlements  Loss  Assets  Enrollment  Donors  Reputation damage UNIVERSITY OF CUMBERLANDS 4 ADOPTING ERM IN COLLEGES AND UNIVERSITIES  Think tank of HE to discuss ERM in HE  2001  Pricewaterhouse Coopers  NationalAssocofCollegeandUnivBusOfficers (NAUCUBO)  Focus  Definition of risk  Risk drivers in HE  Implementation of risk management to assess, manage, monitor risk  Proactively engage the campus community UNIVERSITY OF CUMBERLANDS 5 UNIVERSITY OF WASHINGTON  Sentinel event  $35 million fine for Medicare and Medicaid overbilling  Push to implement ERM to improve compliance  UWis built on a decentralized governance model  Started with  Strategic Risk Initiative Review Committee (SRIRC)  Each initiative asked  Does this proposal add value?  What obstacles are apparent and how can they be addressed?  How can this proposal be improved? UNIVERSITY OF CUMBERLANDS 6  Committee recommendation  Create a Culture-Specific ERM  Examined other HEIs UNIVERSITY OF CUMBERLANDS UNIVERSITY OF WASHINGTON (CONT’D) 7 UW EVOLUTION OF ERM UNIVERSITY OF CUMBERLANDS 8 UW ERM STRUCTURE UNIVERSITY OF CUMBERLANDS 9 UW’S ERM INTEGRATED FRAMEWORK UNIVERSITY OF CUMBERLANDS 10 UW’S ERM PROCESS UNIVERSITY OF CUMBERLANDS 11 UW’S RISK ASSESSMENT: LIKELIHOOD AND IMPACT UNIVERSITY OF CUMBERLANDS 12 SUMMARY Outcomes are consistent with guidance offered by • National Association of College and University Attorneys (NACUA) UNIVERSITY OF CUMBERLANDS NACUA eight critical factors • • • • • • • • Establish the right vision and realistic plan Obtain senior leadershipbuy0inanddirection Align with mission and strategic direction Attack silos at the outset Set objectives and performance indicators Stay focused on results Communicate vision and key outcomes Develop a sustainable process versus a one-time project 13 ITS 835 ENTERPRISE RISK MANAGEMENT CHAPTER 6 STRATEGIC RISK MANAGEMENT AT THE LEGO GROUP INTRODUCTION  LEGO Group history  Strategy  Legacy risk management  Enterprise risk management at LEGO  Initial ERM  Monte Carlo simulation  Active Risk Assessment of Business Projects (AROP)  Preparing for Uncertainty  The PAPA model  Risk management ROI 2 LEGO GROUP HISTORY  Headquarters in Billund, Denmark  Family owned  Second largest toy manufacturer (globally)  Founded in 1932  Iconic bricks first introduced  Bricks manufactured since 1958 fit with one another  2400 different brick shapes  Manufactured in plants across four countries 3 LEGO STRATEGY  LEGO mission  “Inspire and develop the builders of tomorrow”  LEGO vision  “Inventing the future of play”  Growth strategy  Innovation strategy 4 ERM AT LEGO  Risk management developed in 4 stages  Step 1: Enterprise risk management  Step 2: Monte Carlo simulations  Step 3: