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Five Critical Risks (and Opportunities) that Schools Should Be Engaged with in 2022

21/07/22
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With the rapidly changing landscape due to COVID-19, government change, geopolitical uncertainty, rising interest rates, rising costs and a plethora of other issues, the governance and risk environment that governing body directors and school leadership are operating in remains as challenging as ever. We are truly living in ‘VUCA’ times – where the outlook is volatile, uncertain, complex, and ambiguous.

 

But amidst these challenges, for governing body directors and school leaders who are well prepared, sound enterprise risk management provides a strong framework for identifying the emerging risks on the horizon and, critically, the opportunities for staying ahead.

 

The World Economic Forum publication, The Global Risks Report 2022, looked across the globe at the key risks and risk perceptions that leaders foresaw in 2022 and beyond. It is critical reading for directors and school leaders who have, or wish to develop, a long-term strategic view. Dozens of risks are identified in the report.

 

But for high-impact organisations in Australia operating in highly regulated industries, such as non-government schools, what are the critical risks and opportunities that directors and school leaders should be scheduling time to consider in their upcoming governing body meetings?

 

We have considered five that we think are the most relevant and important.

 

 

1. Staffing and Talent

If the first six months of 2022 can be used as a guide, attracting and retaining quality staff will be a constant challenge for the remainder of this year and moving in to 2023.

 

COVID-19 has upended aspects of the economy, and labour markets are unsettled. The COVID-19-settings within Australia will continue to evolve, leading to ongoing uncertainty for workers in all sectors. As we have become more accustomed to living with the virus, we have become more accustomed to teaching and non-teaching staff being impacted and unavailable at short notice. Nonetheless, the large number of and duration of staff absences are still very challenging for schools and for their students.

 

Evidence regarding the so-called ‘great resignation’ is also varied. The impact of the last few years has caused many school staff to resign and to try new careers, or to live in different places, as they have taken time to reassess fundamental aspects of their lives. In other industries, the flexibility that employers have afforded to employees, which looks here to stay in many places, has been embraced by workers. Schools may need to find ways to use this to their advantage. There is no doubt that the education sector is under significant staffing pressures.

 

The ‘search for talent’ is real, but for proactive schools, as we wrote in our previous article, there is opportunity. Schools need to articulate and promote a strong employee value proposition centred around their mission and purpose, supported by a commitment to ongoing staff development, focused on both competencies and capabilities. At this time of the year when staff may be looking for change and schools soon begin to advertise for new staff, retaining quality staff would be of much greater significance and value, and less cost too.

 

 

2. Health and Wellbeing

 

All workers in all industries have been impacted by COVID-19. However, people in jurisdictions that have experienced the heaviest lockdowns have been impacted most significantly. In the Global Risks Report 2022, mental health deterioration is fourth on the list of risks that have worsened the most since the start of the COVID-19 crisis. Staff in our schools have often been on a challenging front-line. Our schools have felt, and will continue to feel, the impacts on individual health and wellbeing of staff and students, perhaps greater than others.

 

The 2021 NEiTA/ACE Teachers Report Card, produced by the Australian College of Educators, revealed that 88 per cent of teachers had considered quitting the profession since the start of the pandemic. Their survey of 571 educators from all sectors and jurisdictions found that 60 per cent felt disregarded by parents, more than 75 per cent felt stressed during a typical working week, 37 per cent reported little or no satisfaction from their job and 84 per cent had considered leaving the profession in the last 12 months. For our school leaders, the levels of change and uncertainty coupled with ongoing staffing shortages have made it an incredibly challenging time to operate. The demands are significant.

 

According to Mccrindle, in “Top Five Education Trends”, almost 97 per cent of parents surveyed believed that schools should have a holistic focus and play some role in the management of student wellbeing. Nearly 50 percent believed that schools should provide individualised support for wellbeing but also refer on to other experts. School Governance has noted that schools have also had to work out how to assist students to maintain wellbeing and how to support them during periods of social isolation.

 

In addition, under work health and safety legislation, governing body directors and school leaders (officers) carry personal liabilities in relation to the health and safety of their workforces and their students and visitors. School leaders need to make time to assess the health and wellbeing impacts on their staff and students and to consider how they invest time and resources into supporting the overall health and safety of their teams. It is increasingly recommended that governing body directors be included in the provision of such training and resources. For governing bodies, it is essential that they also commit to support mechanisms for all staff and appropriate training for school leaders, so that the leaders know how to identify risks in their teams and to provide the right support or guidance, as needed.

 

 

3. Cyber-resilience

 

The Global Risks Report 2022 also found that Australian executives consider the top business risk for the next two years will be a failure of cybersecurity measures. Cybersecurity threats are growing – in 2020, malware and ransomware attacks increased by 358 per cent and 435 per cent respectively.

 

According to The Conversation, cyberattacks have hit schools and colleges harder than any other industry during the pandemic. In 2020, the average ransomware attack cost educational institutions $2.73 million each including the costs of downtime, repairs and lost opportunities. That is $300,000 more than the next-highest sector – distributors and transportation companies.

 

In response to the COVID-19 pandemic, schools across the country have invested more in their digitisation plans, to accommodate both staff and students. A consequence of this has been a heightened risk of cybersecurity breaches, including data breaches and privacy breaches.

 

Quite frankly, schools are highly at risk, given the extent of personal information that they hold and the relative immaturity of cyber-resilience across this sector.

 

In May 2022, Security Magazine identified a number of cybersecurity threats for schools. Of greatest significance were student/teacher driven vulnerabilities such as phishing links and malicious hacking of live conferencing classrooms, and ransomware attacks. They also identified a third risk for post school students relating to fee payments.

 

These threats are real, and they are ongoing. School governing bodies and school leadership need to acknowledge this and plan now. It is critical that schools continue to invest in training and education for their staff and students, conduct drills, run internal testing, deploy anti-ransomware technology, and encourage good online behaviour. An investment of time and resources in these efforts will significantly mitigate the consequences of these cyber-attacks, which are bound to occur. It is not a matter of if but when.

 

 

4. Environmental, Social and Governance (ESG)

 

School governing bodies and leaders often place the most attention on immediate or short-term risks. However, schools are now under increasing pressure to plan and manage for longer-term environmental, social and governance (ESG) risks.

 

The pressure is coming from parents and carers, regulators, students, the wider community and their staff. ESG risks encompass all non-financial topics that are not typically captured by traditional financial reporting.

 

Schools that fail to plan for and manage ESG risks will not only increase their exposure to environmental threats, but also higher costs of capital, more difficulty in attracting and retaining quality staff and push-back from parents. In The Global Risks Report 2022, the list of the decade’s top 10 most severe global risks is dominated, predictably, by environmental (five) and societal (three) risks.

 

School governing bodies need to make time to discuss these risks and opportunities. High-impact school governing bodies and leaders have an opportunity to lead on many of these issues and to add to their school’s compelling value propositions.

 

For example, in relation to environmental risks, what is the school’s position regarding carbon offsets and waste and pollution management? In relation to social risks, what steps are they taking to manage health and safety and to engage with the education community within which they operate? And in relation to governance risks, are they taking the necessary steps to ensure adequate levels of governing body diversity, transparency and reporting?

 

 

5. Regulatory Change and Compliance

 

The pace of regulatory change for non-government schools in some jurisdictions has been frantic. For others, thankfully regular but not as quick. Nonetheless, amidst the uncertain and challenging environment that schools are operating in, keeping up with the level of regulatory and compliance change is complex, challenging and risky in itself.

 

For most schools, understanding the changes is not core business, and implementing the necessary operational changes can be resource intensive and complex. Between 2005 and 2019, the sheer increase in regulatory restrictions in delegated legislation was immense, increasing three-fold across all industries.

 

In 2021, School Governance developed a three part document describing the three registration ‘pain points’ for schools. In the first article, it was noted that the jurisdictional regulators tend to update their requirements either annually or at least every two to three years. This has been noted in two articles regarding Victoria’s and Queensland’s registration changes for 2022.

This means that schools that go through re-registration and are given a set term of registration (usually up to five years) often find that they are no longer compliant by their next re-registration if they have not kept on top of any new or changed requirements in their jurisdiction’s registration manual since their last re-registration.

It is very probable that other jurisdictions will look at making changes for the commencement of the 2023 school year if they have not done so already. Therefore, it is critical that all schools provide up-to-date, compliant, and transparent resources to support their staff, students and wider community in order to maintain their ongoing registration. It is no longer a pass once and think about it again in five years scenario!

 

Conclusion

 

As school governing bodies and school leaders continue to deliver on their 2022 plans and start to spend time planning for 2023, there are simple, practical steps that they can take which will help turn these risks into opportunities:

 

  • openly discuss and explore risks - both current and emerging
  • allocate sufficient time at governing body meetings for the discussion of risks and strategy
  • amend your current strategic risk registers and strategic plan to ensure that new or emerging risks will be sufficiently mitigated against
  • regularly assess the likelihood and impact of these risks and conduct/attend workshop mitigation strategies.

 

The saying goes that “change creates opportunity”. As the world continues to respond and move towards a post-COVID era, change will continue to be a constant. But therein lies the opportunity.

 

School governing body directors and school leaders who know and acknowledge this and allocate sufficient time and resources to consider the risks and opportunities like those identified above will put themselves ahead of competitors and their peers.

 

 

 

Authors

 

Tim Kelly

Tim is the Head of Content Services at CompliSpace. Tim has over 15 years’ experience as a senior lawyer and executive within industry and private practice, including at top-tier law firms. Tim combines his skills and experience and his passion for high-impact sectors to provide legal, governance, risk and compliance and content advice and support to boards, executives and organisations. Tim holds a Bachelor of Laws, Bachelor of Commerce, a Graduate Diploma of Education and is admitted as a Solicitor of the Supreme Court of Victoria.

Craig D'cruz

With 39 years of educational experience, Craig D’cruz is the Principal Consultant and Sector Lead, Education at CompliSpace. Craig provides direction on education matters including new products, program/module content and training. Previously Craig held the roles of Industrial Officer at the Association of Independent Schools of WA, he was the Principal of a K-12 non-government school, Deputy Principal of a systemic non-government school and he has had boarding, teaching and leadership experience in both the independent and Catholic school sectors. Craig has also spent ten years on the board of a large non-government school and is a regular presenter on behalf of CompliSpace and other educational bodies on issues relating to school governance, school culture and leadership.

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