In universities, risk managers identify and prepare for threats to the success of a university, particularly under times of stress, although few will know them by name within their own institutions. Risk managers from various industries have told me in my own research that one of the hardest parts of their jobs is justifying their existence to senior management beyond industry compliance.
The unseen work of risk managers can build resilience and continuity, with a preoccupation with failure, as reputation risk is considered of utmost importance for senior managers of all businesses. Compare this to the spread of infectious disease, which although believed to be among the top 10 risks in terms of impact, has been considered unlikely to materialise, until now.
That said, recent research has indicated that collective vulnerability to the socioeconomic impacts of infectious disease crises has been increasing.
Of course, certain plans to ensure economic and operational resilience – such as building redundancy into operations or hoarding cash – may not be cheap. Those sceptical of predictions could see such expenses as a waste of money, as they become blinded by the illusory nature of uncertainty, and their own ability to tame the risk gods.
It is in these scenarios, like those we face today with the Covid-19 outbreak, that risk managers’ existence becomes justified to the sceptics. For today, like no other, they are responsible for what can and can’t be achieved under the shroud of uncertainty. Universities that already have actionable plans in place for say, staff working from home or protecting cash reserves, will be grateful for the work of risk managers.
In the past two decades, the threat of terrorism led to requests from risk managers and regulators in the business world to establish reserve premises for key personnel and technology. The profound weakness of an over-reliance on primary sites (where all an organisation’s operations take place) during crises was highlighted by the attacks on 11 September 2001.
But in reality, since then, very few reserve locations have been needed for that purpose. I know of none specifically built for that purpose in higher education.
As the outbreak has spread, students’ and lecturers’ living rooms have become their very own “war room” – a secondary work site safe from public transport and all the human contact we have begun to fear.
The power of the internet to ensure university and all other business continues, has not gone unnoticed by the financial markets. Video conferencing companies such as Zoom Video Communications have seen record usage, and a 40 per cent increase in its share price since 31 January when Russia, Spain, Sweden and the UK confirmed their first cases of the virus.
There have been some excellent early moves by universities to move to online teaching, with LSE being the first. They and others institutions that followed must feel safe in the knowledge that studies will go on, and they aren’t unintentionally contributing to the spread of the virus. Those still operating business as usual will be having difficult conversations with staff, students and labour unions, as education secretary Gavin Willamson’s position on university closures becomes less justified.
This is a social responsibility (forced or not) that we will all have to come to terms with as working from home and social distancing becomes the new norm. The inability to bend and flex in the face of this virus will undoubtedly break companies both financially and operationally. British airline Flybe was an early notable casualty given its already precarious financial position prior to the outbreak. In all likelihood it won’t be the last British household name to fall victim to the coronavirus – this virus is most potent against the already weak.
Social distancing and travel bans will bring big problems for universities that have failed to diversify their international student populations. An over-reliance on one particular source region for students could prove their business models untenable very quickly.
If the claims made by Universities UK prior to the most recent strike action are to be believed, the “challenging environment” brought on by a freeze in tuition fees and Brexit uncertainties that led to the majority of their 341 scheme employers rejecting union demands on the grounds of affordability is about to be tested further.
However, those universities that can remain malleable to the impositions that the virus brings will undoubtedly be at a competitive advantage over their slower, less resilient rivals. Distance learning is an obvious intervention that can be taken now to soften the economic blow to institutions. Although online learning is not new – The Open University has been doing it well since day dot – universities could come out of this with a competitive online learning platform that will be valuable when operations go back to normal.
Those persuasive university risk managers who were able to get senior management to open their coffers quickly to implement business continuity action plans, while getting operational resilience embedded and accepted by schools and faculty in the past, will no doubt be happier than most.
It is not that their universities are standing the tallest, but that they are able to bend the farthest in the face of the unprecedented circumstances we are witnessing.
Cormac Bryce is senior lecturer in insurance and risk at Case Business School at City, University of London.
