As with any organization, at UFV risk is a part of everything we do. In fact, taking the right risks in the right way is what leads to rewards.
UFV's risk management team serves the university by helping UFV defines how much risk it’s willing to accept and then working to create an environment the helps our community to make safe and risk-appropriate choices.
Enterprise risk management defined
Enterprise risk management (ERM for short) is the culture, capabilities, and practices, integrated with strategy-setting and its execution, that an organization relies on to manage risk in creating, preserving, and realizing value.
UFV's enterprise risk management program
Two main questions drive UFV's ERM program:
- Are we aware of our key risks?
- Are we in control of them?
The ERM program at UFV aims to develop and deploy strategic risk management protocols that we can use to integrate risk management into our business and strategic processes which allows us to take the right risks to create value as well as being able to respond and mitigate risks appropriately.
How UFV measures risk
To measure risk, we use a simple formula:
Risk = Likelihood * Consequences
|5 - Almost certain
||Risk to core strategic initiatives is expected to occur at least one or more times in the coming year.
|4 - Likely
||Risks to core strategic initiatives has occurred several times or more in your career, and is expected to occur at least once in the next three years.
|3 - Possible
||Risk might occur at some point (i.e. the event could occur at some point in the next five to ten years).
|2 - Unlikely
||Risk could occur at some time (i.e. the event has not yet occurred but could occur at some time in your career given its occurrence in the industry).
|1 - Rare
||Risk may occur only in exceptional circumstances (i.e. you have not heard of this occurring elsewhere in the industry and don't expect it to occur here).
|5 - Catastrophic
||Financial impact would be almost impossible to recover from.
||Inability to continue operations and execute on the strategic plan.
||Loss of ability to provide educational services.
||Front page news for an extended time. Complete loss of stakeholder and public trust.
|4 - Major
||Material financial impact to the university.
||Substantial impact on strategic objectives and/or significant change requiring top-level intervention and changes in the current operating model.
||Significant impact on the ability to achieve academic objectives across the organization.
||Material impact on public reputation, community, student and employee engagement requiring fundamental shift in the operating plans.
|3 - Moderate
||Material financial impact to one or more locations or departments.
||Inability to deliver on key strategic objectives in one or more areas, likely resulting in moderate changes to investment strategies, or changes in operational plans.
||Inability to deliver student services and academic curriculum in one or more faculties.
||Short-term media/reputation impact, and temporary loss of stakeholder confidence. Some impact on student experience.
|2 - Minor
||Some financial impact affecting a single location or department.
||Consequences would threaten some operational objectives, but can be resolved within the departmental plans and activities.
||Limited impact on the ability to deliver student services and academic curriculum.
||Minor impact on specific stakeholders that could be addressed with heightened attention from management in a targeted response.
|1 - Insignificant
||Insignificant financial, operational and academic impact addressed within the department or faculty through routine processes and procedures. No external reputational impact or impact on core strategic initiatives.