One of the primary responsibilities of a board member or leader at an institution of higher education is effectively overseeing institutional risk. With the new administration in 2025 and its potential to create new risks and amplify existing risks, it is important now more than ever to be proactive and look at risk management holistically. But how?
Why Boards and Executives Should Support ERM
Enterprise Risk Management (ERM) allows an institution to proactively identify, assess, monitor, and prioritize risks that can affect the institution’s objectives. ERM allows for risk-informed decision-making, increased transparency, and greater governance that supports an institution's goals and objectives. Engaging the board with mission-critical risks through an ERM program should be at the top of every institution’s agenda this year. According to the RIMS State of ERM Report, “Organizations with formalized ERM programs perform better than organizations without formalized ERM programs.” As the world begins to move ahead, facing major political, geopolitical, and social challenges, traditional risk management (or “siloed risk management”) will no longer be enough.
Emerging Risks in 2025
The following risks require a proactive and enterprise approach; and by relying on traditional siloed risk management, there may be blind spots.
Diversity, Equity, and Inclusion (DEI) programming investigations and crackdowns
Sex and gender identity, especially in athletics
Federal funding freeze concerns on grants, loans, and research
Targeted investigations under the False Claims Act
Immigration and international travel changes
Free Speech and the First Amendment
Pivot away from sustainability initiatives
A Roadmap to ERM
In 2024, the American Institute of Certified Public Accountants-Chartered Institute of Management Accountants (AIC