Independent schools embrace risk management: Survey
More than two-thirds of independent schools have a dedicated senior staff member responsibile for enterprise risk management (ERM), according to a recent survey of more than 100 bursars from across Australia and New Zealand.
The survey, conducted at the recent Association of School Business Administrators (ASBA) Biennial Conference by the accounting and advisory firm Nexia Australia, found 72% of the respondents had allocated responsibility for risk management (as opposed to workplace safety) to a staff member.
Of these schools, 80% had implemented or were in the process of implementing an ERM program. 73% of the schools which had an ERM program had designed it in accordance with the ISO 31000 risk standard.
“The independent school sector appears to be embracing risk management,’’ said the report authored by Nexia audit and assurance services partner Lester Wills.
“This is consistent with the general trend we are seeing in the sector as schools adopt a more corporate approach to managing risk,” said the report.
The survey found 84% of independent schools with more than 1000 students had a senior staff member allocated responsibility for risk management. This compared to 60% for schools with between 600 to 1000 students, 64% for schools with between 400 to 600 students and 69% for schools with less than 400 students.
The survey has underlined the importance for schools to allocate responsibility for ERM. It found only 8% of schools without a senior staff member responsible for risk management had implemented or were in the process of implementing an ERM program.
49% of schools without a staff member overseeing risk management blamed cost as the main obstacle to implementing an ERM program, while 24% blamed a lack of internal skills, 22% said it “was not a key focus”, 11% said it was too difficult, while 5% said it was not their culture.
“Implementing an ERM program does not need to be an expensive exercise as it is scalable based on the size and complexity of the school,’’ said the report.
“The resource and knowledge shortage can be minimised through seeking risk experts as part of the schools governing board.”
Schools with ERM programs were also found to see greater benefits in adopting formal risk management frameworks than those without. For instance, 45% of schools with an ERM program saw better staff engagement as one benefit compared to 19% for those without a program.
Likewise, 45% of schools with a risk management program saw it could help explore opportunities compared to 32% of those without a risk management program.
“Schools which have implemented an ERM program viewed ERM more positively as a means of identifying opportunities for the school,” said the report.
The biggest benefit from having an ERM program, according to 77% of all the respondents in the survey, was that it could identify weaknesses in their organisation. While 73% said an ERM program could protect an organisation from risk.
To view the survey, click on this link: Nexia 2013 Independent Schools survey