Managing risks offers potential for better decision making

Running an institution like Penn State can be risky business, and that is why the University is taking extra steps to identify risks and prepare itself for all possible outcomes.

Finance and Business’s Enterprise Risk Management (ERM) Key Initiative Team and the Risk Management Office are spreading the word about risk awareness to the Penn State community through several modes of communication and education opportunities, including safety programs, risk training and online communications.

“Getting everyone at Penn State to be consciously focused on risks is a top priority for us,” said Gary Langsdale, University risk officer and key initiative manager. “Being aware of risks makes everyone a better manager and a more confident decision maker.”

In the new Finance and Business (F&B) strategic plan, the ERM Key Initiative refocused and broadened its goals, concentrating on training Penn State minds to evaluate all risks when making decisions and balance them with potential benefits.

“This isn’t identifying the risks of a project and then throwing the whole thing out,” Langsdale said. “We do want to take reasonable, manageable risks.”

According to the new F&B Strategic Plan, the ERM Key Initiative’s goals include providing tools to the University community to enable them to make better risk-adjusted decisions, raise awareness throughout the University and embed the concept of “management of risk” into the University’s overall planning.

The ERM Key Initiative Team is made up of 14 University employees from different areas. The diverse experiences of the team members provide a connection to a broad range of University departments. It provides a strong understanding of what risks Penn State faces -- both at the office level and University-wide.

“F&B is committed to being properly prepared,” said Gary Schultz, senior vice president for finance and business/treasurer. “The Key Initiative Team is a diverse group of dedicated individuals that realize the importance of being ready.”

Recently, the Penn State Milton S. Hershey Medical Center thoroughly examined possible risks when planning for future expansion, renovation and program initiatives. Before furthering any plans, hospital leaders sat down and made a list of risks that may affect the hospital, the community, the University and the region.
“By making a list of the risks, Hershey was better prepared for what they were doing,” Langsdale said. “It was a huge success.”

To further educate themselves, several key initiative team members met with officials at other universities to see how other schools handled risk management during crisis situations. The group visited Louisiana State University and Tulane University in Louisiana after Hurricane Katrina had devastated the region.

“We probably won’t be affected by hurricanes here, but we could be in a similar position,” Langsdale said. “If something were to happen in the nearby cities, we could be affected by a stream of people coming into the community. It’s just another example of being prepared.”

For more information on risk awareness and risk assessment at the University, visit http://www.controller.psu.edu/Divisions/RiskManagement/. Risk-related articles will be compiled on this site for further reading on the topic.
 

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Last Updated March 19, 2009