By: Dr. Azleen Ilias
Recent issues among Higher Education Institutions (HEIs) in Malaysia include losses related to possible corruption and becoming a risk to other institutions in Malaysia that involve corruption, malfeasance, or abuse of power. Issues like these are not new to HEIs (public and private) in Malaysia. As such, these issues lead to the need for comprehensive risk management instead of just corruption risk management. Apart from the risk of corruption, other risks arise after the COVID-19 season, such as reduced government funding, lack of skills among students, problems with online learning, students’ ability to learn online, and the survival issue of most HEIs. This indicates the need for more robust risk management and internal control that should be implemented in HEIs to ensure that they and the education sector can remain sustainable in the current era.
Risk management is used mainly in the private sector, such as in the Malaysian listed companies. Risk management and internal control are vital in the private sector since it must preserve the stakeholders’ wealth. However, risk management is not an exception in the public sector. The government must emphasise reducing the risks it faces, such as fraud, abuse of power, and mistakes in making decisions that do not follow the needs of the government or the public sector.
Risk management covers a wide area and can be used in the education industry. The top five risks are related to cybersecurity and information governance, student experience, student recruitment, mental health, and financial sustainability. All HEIs in Malaysia may face these risks as they try to run their institutions and reach their strategic goals. There is an initiative in the Green Book that published by the Ministry of Higher Education, focused on the role of the board of directors and risk management. It was based on the University Transformation Programme and pointed out that there is only a limited risk management policy in place. The limitations of risk policy, risk framework, and risk officer exist among autonomous public universities in Malaysia, and the higher education sector should be aware of all possible risks to ensure control action.
HEIs in Malaysia should develop and implement a comprehensive risk management policy aligned with the principles of ISO 31000:2018 to overcome the risks above and remain sustainable. This policy should articulate the HEI’s commitment to risk management, define roles and responsibilities, and set the overall context for risk assessment and treatment. The ISO made it very clear that when an organisation develops its risk management framework, it must consider the principles that serve as the foundation for risk management that can fit the education industry.
The HEIs must ensure effective dissemination of the policy within the organisation to ensure that all stakeholders are fully aware of its significance in promoting a culture of risk awareness.
They should establish and maintain a systematic and continuous evaluation of potential risks. They should analyse and evaluate potential risks that could hinder the organisation’s goals, considering both internal and external issues.
They also need to periodically assess and revise the risk register to capture accurate modifications in the risk environment. This continuous process guarantees that the HEIs stay proactive in recognising emerging threats and adjusting their risk management measures accordingly.
Furthermore, the HEIs must incorporate risk management into the institution’s decision-making processes. They should ensure that risk factors are carefully considered when establishing goals, formulating strategies, and making critical decisions.
They should also implement a framework for ongoing monitoring and enhancement. The framework would enable the HEIs to evaluate consistently the efficiency of the risk management procedures, controls, and interventions currently implemented.
In conclusion, early risk management in education has several benefits that help HEIs succeed. Risk management covers all areas, from student safety to financial stability, legal compliance, and reputation protection. HEIs may overcome problems, make informed decisions, and create a resilient environment for quality education and strategic growth by taking proactive risk management initiatives. A thorough risk management strategy reduces risks and improves the institution’s ability to respond, creating a safe, stable, and conducive learning environment.
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The author is a Senior Lecturer at the Department of Accountancy and Finance, UNITEN Business School (UBS), Universiti Tenaga Nasional (UNITEN). She may be reached at azleens@uniten.edu.my
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