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

After 20 years in the business, Navy Pier’s Director of Risk Management values her relationships in the industry more than ever.
By: | June 1, 2017 • 4 min read

R&I: What was your first job?

Working at Dominick’s Finer Foods bagging groceries. Shortly after I was hired, I was promoted to [cashier] and then to a management position. It taught me great responsibility and it helped me develop the leadership skills I still carry today.

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

While working for Hyatt Regency McCormick Place Hotel, one of my responsibilities was to oversee the administration of claims. This led to a business relationship with the director of risk management of the organization who actually owned the property. Ultimately, a position became available in her department and the rest is history.

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

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The risk management community is doing a phenomenal job in professional development and creating great opportunities for risk managers to network. The development of relationships in this industry is vitally important and by providing opportunities for risk managers to come together and speak about their experiences and challenges is what enables many of us to be able to do our jobs even more effectively.

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

Attracting, educating and retaining young talent. There is this preconceived notion that the insurance industry and risk management are boring and there could be nothing further from the truth.

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

In my 20 years in the industry, the biggest change in risk management and the insurance industry are the various types of risk we look to insure against. Many risks that exist today were not even on our radar 20 years ago.

Gina Kirchner, director of risk management, Navy Pier Inc.

R&I: What insurance carrier do you have the highest opinion of?

FM Global. They have been our property carrier for a great number of years and in my opinion are the best in the business.

R&I: Are you optimistic about the US economy or pessimistic and why?

I am optimistic that policies will be put in place with the new administration that will be good for the economy and business.

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

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The commercial risks that are of most concern to me are cyber risks, business interruption, and any form of a health epidemic on a global scale. We are dealing with new exposures and new risks that we are truly not ready for.

R&I: Who is your mentor and why?

My mother has played a significant role in shaping my ideals and values. She truly instilled a very strong work ethic in me. However, there are many men and women in business who have mentored me and have had a significant impact on me and my career as well.

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

I am most proud of making the decision a couple of years ago to return to school and obtain my [MBA]. It took a lot of prayer, dedication and determination to accomplish this while still working a full time job, being involved in my church, studying abroad and maintaining a household.

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

“Heaven Is For Real” by Todd Burpo and Lynn Vincent. I loved the book and the movie.

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

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A French restaurant in Paris, France named Les Noces de Jeannette Restaurant à Paris. It was the most amazing food and brings back such great memories.

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

Israel. My husband and I just returned a few days ago and spent time in Jerusalem, Nazareth, Jericho and Jordan. It was an absolutely amazing experience. We did everything from riding camels to taking boat rides on the Sea of Galilee to attending concerts sitting on the Temple steps. The trip was absolutely life changing.

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

Many, many years ago … I went parasailing in the Caribbean. I had a great experience and didn’t think about the risk at the time because I was young, single and free. Looking back, I don’t know that I would make the same decision today.

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

I would have to say the relationships and partnerships I have developed with insurance carriers, brokers and other professionals in the industry. To have wonderful working relationships with such a vast array of talented individuals who are so knowledgeable and to have some of those relationships develop into true friendships is very rewarding.

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

My friends and family have a general idea that my position involves claims and insurance. However, I don’t think they fully understand the magnitude of my responsibilities and the direct impact it has on my organization, which experiences more than 9 million visitors a year.




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