Risk Insider: Paula Vene Smith

Does ERM Fall Apart in Volatile Times?

By: | March 15, 2017 • 2 min read
Paula Vene Smith directs the Purposeful Risk Engagement Project (PREP) and is a professor at Grinnell College. Paula consults on risk in higher education, and has written Engaging Risk: A Guide for College Leaders. She can be reached at [email protected]
Topics: Education | ERM | Risk Insider

Today’s headlines in higher education report high uncertainty and rapid change. Campus controversies erupt over free speech, prospective foreign students express newfound reluctance to study in the United States, and research funding is threatened in science, arts, and humanities. Even the principle of evidence-based decisions, fundamental to the academic enterprise, is questioned by national leaders. Do these times call for a new look at risk?

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Colleges and universities only recently started to see value in developing a way to identify, evaluate, and address risks at the institutional level. By the time Enterprise Risk Management began to take hold on campus, most businesses and government agencies had already established systems of ERM. Realizing it wouldn’t work simply to replicate standard ERM frameworks, academic leaders developed their own systems based on shared governance and sustaining their mission.

The new presidential administration has issued statements, directives, and orders on issues from immigration policy to transgender rights; nearly all have implications for the academic realm.

But in recent months, uncertainty in academic decision-making has risen steeply. The landscape for higher education and for nonprofit organizations grows harder to navigate. The new presidential administration has issued statements, directives, and orders on issues from immigration policy to transgender rights; nearly all have implications for the academic realm. What happens to ERM programs assailed by so much change?

While this question affects any organization that practices ERM, it looms largest for those with fledgling and new programs—and that includes most academic institutions, especially the smaller ones. I’ve noticed three ways academic institutions are responding to these times of intensified uncertainty:

  • “Things right now are too volatile to do ERM.” Struggling to manage stepped-up risks in their own areas, administrators stop making institutional risk meetings a priority, and ERM goes on hold;
  • “Same old ERM.” The system proceeds on auto-pilot, without reference to the current political situation. A quarterly meeting of the ERM Council looks like the same meeting held a year and a half ago. Each risk owner summarizes what’s happened since last time and says, “We’re still working on it.” No one wants to acknowledge a new climate.
  • “Wait, let’s re-evaluate.” A risk leader makes the group face a new reality. The meeting agenda is rewritten; risk owners are asked to directly address potential and recent changes in the legal, political, and cultural environment.
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This third approach enables new, crucial questions: How can we protect access for students whose immigration status makes them vulnerable? How does the rise of bigoted speech in the public sphere affect campus discourse? How might we respond to changing legal interpretations of Title IX?

Such adjustment to new circumstances should occur naturally as part of ERM. But in practice, people are so accustomed to their routines that unless it is given a name, even very large-scale change can be minimized or overlooked until it’s too late. Neither “ERM on hold” nor “ERM as usual” represents a wise option. Risk leaders should address big change head-on. Only then can Enterprise Risk Management—especially if newly established and still fragile—continue to drive good institutional decisions.

More from Risk & Insurance

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Risk Management

The Profession

Wawa’s Director of Risk Management knows that harnessing data and analytics will be key to surviving the rapid pace of change that heralds new risk exposures.
By: | July 27, 2017 • 5 min read

R&I: What was your first job?

My first job was at the age of 15 as a cashier at a bakery. My first professional job was at Amtrak in the finance department. I worked there while I was in college.

R&I: How did you come to work in risk management?

A position opened up in risk management at Wawa and I saw it as an opportunity to broaden my skills and have the ability to work across many departments at Wawa to better learn about the business.

R&I: What is the risk management community doing right?

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The advancements in analytics are a success for the industry and offer opportunities for the future. I also find value in the industry focus on emerging and specialty risks. There is more alignment with experts in different industries related to emerging and specialty risks to provide support and services to the insurance industry. As a result, the insurance industry can now look at risk mitigation more holistically and not just related to traditional risk transfer.

R&I: What could the risk management community be doing a better job of?

Developing the talent to grow with the industry in specialization and analytics, but to also carry on the personal connections and relationship building that is a large part of this industry.

Nancy Wilson, director, quality assurance, risk management and safety, Wawa Inc.

R&I: What was the best location and year for the RIMS conference and why?

I have had successes at all of the RIMS events I have attended. It is a great opportunity to spend time with our broker, carriers and other colleagues.

R&I: What’s been the biggest change in the risk management and insurance industry since you’ve been in it?

I think the biggest challenge facing most companies today is related to brand or reputational risk. With the ever-changing landscape of technology, globalization and social media, the risk exposure to an organization’s brand or reputation continues to grow.

R&I: What emerging commercial risk most concerns you?

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The changing consumer demands and new entrants into an industry are concerning. This is not necessarily something new but the frequency and speed to which it happens today does seem to be different. I think that is only going to continue. Companies need to be prepared to evolve with the times, and for me that means new risk exposures that we need to be prepared to mitigate.

R&I: Are you optimistic about the U.S. economy or pessimistic and why?

I try to be optimistic about most things. I think the economy ebbs and flows for many reasons and it is important to always keep an eye out for signs of change.

R&I: What have you accomplished that you are proudest of?

I am fortunate to have opportunities professionally that make me proud, but I have to answer this one personally. I have two children ages 12 and 9 and I am so proud of the people that they are today. They both are hardworking, fun and kind. Nothing gives me a better feeling than seeing them be successful. I look forward to more of that.

R&I: What is your favorite book or movie?

This is really hard as there are too many favorites. I do prefer books to movies, especially if there is a movie based on a book. I find the movie is never as good. I have multiple books going at once and usually bounce back and forth between fiction and non-fiction.

R&I: What’s the best restaurant you’ve ever eaten at?

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I have eaten at a lot of different restaurants in many major cities but I would have to pick Horn O’ Plenty in Bedford, PA. It is a farm to table restaurant in the middle of the state. The food is always fresh and tastes amazing and they make me feel like I am at home when I am there. My family and I eat there often during our trips out that way.

R&I: What is your favorite drink?

I do love a good cup of coffee (working at Wawa helps that). I also enjoy a good glass of wine (red preferably) on occasion.

R&I: What is the most unusual/interesting place you have ever visited?

Vacations aside, I do get an opportunity to travel for work and visit our food suppliers. The opportunities I have had to visit back to the farm level have been a very interesting learning experience. If it wasn’t for my role, I would have never been able to experience that.

R&I: What is the riskiest activity you ever engaged in?

My husband, kids and I recently did a boot-camp-type obstacle course up in the trees 24 feet in the air. Although I had a harness and helmet on, I really put my fear of heights to the test. At the end of the two hours, I did get the hang of it but am not sure I would do it again.

R&I: If the world has a modern hero, who is it and why?

The first people that come to mind are those who are serving our country and willing to sacrifice their own lives for our freedom.

R&I: What about this work do you find the most fulfilling or rewarding?

Every day is different and I have the opportunity to be involved in a lot of different work across the company.

R&I: What do your friends and family think you do?

My husband and children have a pretty good sense of what I do, but the rest of my family has no idea. They just know I work for Wawa and sometimes travel.




Katie Siegel is an associate editor at Risk & Insurance®. She can be reached at [email protected]