by SEAN BRAWLEY, RICHARD COOK and ROBERT OLDFIELD

As part of its comprehensive restructure Uni Wollongong needed to reconceptualise what was a fairly traditional higher education sector approach to risk management through a lens of strategy and opportunity.

First, we needed to challenge ourselves. Were we having the right risk conversations? Were we discussing the right risks at the right level within the university? Was the university council getting the information they needed to make informed decisions? The answers were not really, probably not and somewhat.

Unpacking these answers, we found ourselves coming back to the basics: acknowledging that risk is a measure of uncertainty and that many important decisions are often made with insufficient attention to the potential risks and downsides.

To ensure strategic success and compliance, risk management must be set from the top. Council, Senate and executive leadership teams establish the tone and direction through an effective risk management framework and risk appetite statement.

To take a more proactive approach, we researched best practice from the private and public sector and asked key stakeholders, notably the chair of Council’s Risk, Audit and Compliance Committee. The chair gave us a simple mantra from the corporate governance level.  Boards need trust and want no surprises. Our work highlighted the importance of specialist leadership, visible in the increasing prevalence of chief risk officers in the sector and dedicated risk and assurance functions.

Building on this research, the university made the decision to establish a risk and assurance Division, to be led by a new chief risk and assurance officer.  Previously the responsibility for risk was somewhat blurred, with responsibility for servicing most aspects of the three lines (excluding financial audit) sitting in a business improvement function within the chief operating officer portfolio.

Through a national search we were very fortunate to appoint Robert Oldfield as Chief Risk and Assurance Officer. Robert brought experience from business, government, not-for-profit and the higher education sectors. This new division was to be given greater prominence in decision-making, sitting within the newly conceived DVC Strategy and Assurance Portfolio.

The Division will facilitate a greater understanding of both academic and non-academic risks and controls that could hinder the achievement of objectives, as well as ensuring the university is positioned to effectively respond if a material risk were realised.

Risk management needs to move from being a periodic compliance obligation to having a strategic orientation, consistent with the view that risk management should be value adding.

As various strategic options are considered, related risks will be considered to determine whether the potential returns are commensurate with the associated risks. A misalignment of risk and reward will stimulate a discussion on risk mitigation. Such a discussion may contribute to resourcing and budget planning.

The ongoing evaluation of the University’s strategy and proactively developing countermeasures for dealing with the associated risks will ultimately protect and further generate organisational value. A close alignment between risk management and strategy should become an integral part of any strategy-setting process.

By co-locating strategy and risk functions under the same executive portfolio, UOW intends to develop such an integrated approach. The integration of strategy and risk can better prepare universities to navigate an uncertain future.

Sean Brawley is DVC (Strategy and Assurance), Richard Cook is Chief Strategy Officer, and Robert Oldfield is Chief Risk and Assurance Officer at the University of Wollongong.