Universities have incredibly complex risk profiles. Where else might you have teenagers and octogenarians intermingling alongside football stadiums housing tens of thousands of fans, science labs containing combustible chemicals and fraternities hosting inebriated coeds?
To handle all this, risk managers at higher learning institutions must do much of the same work of their corporate counterparts. "It's very similar to a multi-national corporation," said Michael Liebowitz, director of risk management and insurance for New York University. "We have all the same exposures. We have a workforce in the tens of thousands. We have a student body in the tens of thousands."
But much like their peers in the public sector, university risk managers are also tasked with safeguarding what is essentially a small city. "It is an operation that doesn't sleep," said Liebowitz. "It is like a city. It's 24/7/365."
And since it is NYU, that community is far from small. "My 'little' city spans the world," said Liebowitz, noting NYU's global reach from Buenos Aires to a brand new campus in Abu Dhabi. "We're on every continent except Australia."
Making matters worse is how many exposures major universities face. "You name it, they probably have it," said Frank Altiere, president of PMA Management Corp., one of the PMA Companies, a Pennsylvania-based provider of risk management services to more than 200 colleges and universities.
Fortunately, however, higher education institutions also tend to be culturally attuned to the necessity of risk management. The need to protect students is easy for anyone to grasp, and that can help translate across all operations. "For the president of a university, as soon as he attends a football game with 50,000 people, it's easy to say 'what if?'" said Altiere. "There's a lot of what ifs. They don't want to be in the news."
Gary Langsdale, university risk officer for Pennsylvania State University, a PMA client well versed in the risks of an institution where college football reigns, feels the same way. "We love being on the front page of the sports section," said Langsdale. "We don't love being on the front page of the news section."
Of course, even with the best risk management plans, things can still go wrong. The key is being able to show that there was no negligence on the part of the school. "No matter what happens," said Altiere, "you have to be comfortable standing in front of the press saying that you did all you could have done."
One thing that helps Langsdale is the fact that the university is an iconic state institution. For Pennsylvanians, working at Penn State is unlike working for any old company. "We have a really small risk management staff," said Langsdale. "But we have 20,000 staff members who want to do what's right."
They do what's right not out of mandate, but because they are compelled to by the admiration they have for the 155-year-old name on their paycheck. "There is tremendous pride," said Langsdale. "In other places, there is a pride for the products they create or for the work of the department. This is different. Everyone realizes that [Penn State's] reputation rises and falls with how we are perceived."
And when everyone is working to ensure that their individual shop stays clean, the universitywide image is safer. "Reputation is a result of other risks being managed well or not," said Langsdale.
The greatest -- and highest profile -- risk is the students. Protecting buildings is one thing, but the lives of teenagers cannot be quantified. Keeping students safe would be a lot easier, however, if fewer treated their college experience like Animal House. "Penn State used to be the number-one party school," said Langsdale. "Now we're down to number three." Some students may disagree, but for Langsdale, that is improvement.
While student safety may be the greatest risk, it is actually not the most difficult to manage. "When I came to higher education, I thought it would be all about the risks related to the students," said Langsdale, who has been at Penn State for seven years and in risk management for more than three decades.
But that has not been the case. "The thing that worries me the most is what we know we don't know," said Langsdale. "These are the things. It's the person that is running a program that I don't know they're unqualified to run."
Penn State has a research nuclear reactor, for example. Langsdale definitely did not anticipate that when he entered the world of university risk management. The school also has a sociology lab in Center City Philadelphia and conducts nanotechnology research, the risks of which may be very real but are still not widely understood. "We have people all across the state thinking up new ideas," he said. "Ninety-nine percent of them are great and may benefit humanity. But that 1% may have great drawbacks."
Uncertainty can be similarly troubling for Liebowitz, who in addition to protecting students in the City That Never Sleeps has to keep track of both young adults and staffers all across the world -- no matter how inaccessible they may be. "When there was an earthquake in Haiti, I had to know where everyone who might be there was," said Liebowitz. "I have to do that every time something catastrophic happens."
But according to Altiere, even uncertainty cannot overwhelm the university risk managers of today. Those that PMA works with stand out for their ability to understand all the diverse exposures they face. "Of all the industries that have gone through this recession, universities have been among those that have done the best," said Altiere. "Kids continue to enroll, so they could become complacent. But they haven't. The people I talk to really want to continue to improve their institutions...[They] ask 'what can we do to make our schools better?'"
Fitting that this attitude is so aligned with the very concept of education. The foundation of higher learning is parents wanting their children to live a better life than they had. This constant search for personal improvement drives higher learning. And, according to Altiere, that same mentality is now driving university risk management.