Issue link: http://www.e-digitaleditions.com/i/63429
school, using a contingency fee legal firm. Although it is important for business schools to think most litigious culture in the world. Good risk management means making conscious decisions on risk acceptance. Conscious decisions mean documented decisions. Documented means discoverable; discoverable means that, when you guess wrong, evidence is available that proves you understood the possible consequences of your decision—a key element in many court cases. Let me give you a raw example. Say you teach at a busi- ment. To be fair, the academic com- munity in some parts of the world—including Canada, the United Kingdom, and Australia— is making some progress. To be blunt, I believe the U.S. as a whole is going to have a great deal of difficul- ty implementing rigorous, effective enterprise risk management systems. The reason is simple: America is the regard their courses and teaching as products, and utilize a precise system to score and report on the "quality" process in each faculty? Not many. It is, therefore, unlikely that many colleges and universi- ties will leap to join the global trend to integrated, enterprisewide risk manage- ness school where decent data leads you to conclude that 20 percent of your students are cheating, but your school decides formally not to put any more resources toward solv- ing the problem. You have an MBA student who becomes aware that the university has accepted this number of cheaters—and this student fails. Now, if the school has prac- ticed formalized risk management, there will be documenta- tion that shows the faculty consciously considered its per- centage of cheaters, understood what it meant to honest stu- dents, and accepted the risk. This failed student uses the doc- umentation as part of a class action suit against the business BizEd JULY/AUGUST 2002 55 where they think of their students as customers, consciously about such risks and make decisions about how to handle them, there are consequences. In the U.S., such consequences argue in favor of approaches that support claims of "plausible deniability" on the part of senior man- agement. Unfortunately, the academic community is not the only one that faces deterrents to good risk management practices, particularly in the U.S. All sectors of the economy face the same deterrents, leading to vulnerability to terrorists, false stock market disclosure, and other topical events. Whether or not the academic community decides to apply holistic enterprise risk and assurance management practices to itself, business schools should address the risk manage- ment learning needs of their students. Those students almost certainly will be joining organizations that will be expected to implement some form of holistic enterprise risk systems over the next decade. As I recently told a group of professors at a conference in Toronto, if business schools don't teach students enterprise risk management, they are harming their students by teaching antiquated concepts and approaches. In light of recent events, the importance of better approaches to risk and assurance has never been greater. s z Tim J. Leech, FCA•CIA, CCSA, CFE, MBA, is founder and president of CARD®decisions Inc. in Mississauga, Ontario, a company that provides integrated enterprise risk and assurance management software and train- ing systems for clients around the world.