Risk Insider: Paula Vene Smith
Risks That Hide Behind Reputation and Compliance
After agreeing that an emerging risk calls for action, the next step in risk management is to select the best way to treat the risk. Fears about compliance or reputation loom large, and these risks may be given priority in a climate of rapid disclosure fueled by social media and round-the-clock news.
But beware of overlooking the basic question: “What’s at risk?” Have you clarified what vital process, asset, or outcome is threatened? Sometimes a group of leaders may not all arrive at the same answer.
Take the recently reported case of academic fraud at the University of North Carolina, where students apparently were advised to sign up for phony “paper courses” that involved no real academic work, yet provided them with grades and credit to preserve their eligibility for athletic participation.
But framing the problem in terms of reputation can neglect more direct issues, like the safety of minor children, or corruption of data relied upon for key decisions.
As this story broke, early news accounts framed the risk in terms of NCAA compliance. But not long afterward, opinion pieces and articles began pointing out that such fraud can strike at the institution’s academic integrity.
The worth of a diploma is potentially undermined by many years of granting degree credit in the absence of genuine learning effort or academic achievement.
Similarly, when an employee is found to have engaged in unethical or abusive behavior, campus administrators may think first of institutional reputation. Discussion will focus on avoiding litigation, or how to communicate the news in a way that will not cast the school in a negative light.
But framing the problem in terms of reputation can neglect more direct issues, like the safety of minor children, or corruption of data relied upon for key decisions.
In extreme cases, excessive concern for reputation can compound risk by tempting executive leaders to dismiss warning signs, decide not to investigate or report the wrongdoing, or even to engage in cover-up when the situation threatens to become public.
While compliance and reputation are key considerations in choosing how to manage an emerging risk, these issues can mask an underlying risk that is more basic.
Are academic institutions pursuing Title IX compliance primarily to satisfy government officials and look good to prospective students and their families? Or is the goal an ideal learning environment unclouded by the physical and emotional pain of sexual assault, discrimination, and harassment?
The answer to this question is not just rhetorical.
As recently reported in The Washington Post, a number of well-meaning colleges have found that when they step up efforts to encourage reports under Title IX, the relevant statistics can be expected to rise.
While the increase in reporting allows for appropriate follow-up by the institution, it also creates the need to explain to a startled public that a higher number of assault and harassment reports does not necessarily indicate a more dangerous campus.
If the lower statistics from earlier years were due to under-reporting, what benefited was the institution’s reputation rather than the safety of its students.
What risks hide behind the protection of reputation and compliance? Let’s be clear on what we most want to achieve when we choose how to mitigate a risk.