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Leadership from the Top: President Outlines the Charge

At the time of the medical billing scandal, Lee L. Huntsman was president of UW. Huntsman had formerly been the acting provost, associate dean for scientific affairs at the school of medicine, and a professor of bioengineering. The UW Board of Regents had appointed Huntsman in a special session when Richard McCormick, the incumbent, accepted the presidency at Rutgers. Huntsman served for 18 months as president and continued as Special Assistant to the President and Provost for Administrative Transition until 2005 and as a senior adviser to the university for several more years. Mark A. Emmert, former chancellor of Louisiana State University and a UW alumnus, was appointed as the 30th president of UW and professor with tenure at the Evans School on June 14, 2004.

In April 2005, President Emmert charged V'Ella Warren, Vice President for Financial Management, and David Hodge, Dean of the College of Arts and Sciences, with conducting a preliminary review of best practices in compliance and enterprise risk management in corporate and higher education institutions. Warren engaged the Executive Director of Risk Management, Elizabeth Cherry, and the Executive Director of Internal Audit, Maureen Rhea, to conduct a literature search on enterprise risk management, particularly in higher education. Cherry and Rhea engaged Andrew Faris, risk management analyst, to assist, and the three spent nearly two years (from 2004 to 2006) conducting the literature search and finding out how risk management was functioning on other campuses. As they conducted their research, they continued to report their findings to Vice President Warren. They also piloted the risk assessment process with various departments at UW.

Based on their findings and discussions with Vice President Warren, a draft report was compiled to provide initial guidance of the development of a UW- specific framework. The report provided an overview of various approaches to compliance, described best practices at four peer universities (University of Texas system, University of Minnesota, University of Pennsylvania, and Stanford University), identified the common problems encountered in several recent compliance problems at UW, and offered suggestions for actions that UW might take in the effective management of compliance and risk. President Emmert then charged Warren and Hodge to cochair the recommended Strategic Risk Initiative Review Committee (SRIRC). The role of the SRIRC was to continue to investigate best practices in university risk management and make recommendations about a structure and framework for compliance that would fit the UW culture. In a memo to the SRIRC regarding that review, Warren and Hodge noted that they had "developed a framework for university-wide risk and compliance management which builds on [UW]'s decentralized and collaborative character." President Emmert also made it clear that the proposed model should be driven by UW's core values as well as promote "effective use of people's time and energy." In a memo to the deans and cabinet members in 2005, President Emmert declared that UW did not "want or need another layer of bureaucracy."

The SRIRC was comprised of broad university representation, including the Executive Vice President, the Associate Vice President for Medical Affairs, the Senior Assistant Attorney General, the Vice Provost-elect for Research, the Vice Provost for Planning and Budgeting, the Chancellor of the University of Washington-Tacoma, the Athletic Director, the Dean of the School of Public Health and Community Medicine, the Provost and Vice President for Academic Affairs, the Dean of the School of Nursing, the Special Assistant to the President for External Affairs, the Vice President of Student Affairs, two faculty members, and two students. Meeting throughout the fall semester, the SRIRC reviewed the preliminary research material provided by Hodge and Warren and their team and discussed a variety of issues, including the structure for risk management, how risk assessment has been and could be conducted, communication issues, methods for reporting risks, ways to report progress, and others. For each initiative, they asked the following three questions: Does this proposal add value? What obstacles are apparent and how can they be addressed? How could this proposal be improved?

In addition to formal meetings, Cherry, Rhea, and Faris conducted one-on-one meetings with the SRIRC members to gather more information about how they viewed implementation at the university. Because one of the recommendations was the creation of a Compliance Council, meetings were also conducted throughout the campus with director-level personnel to survey their interests and suggestions regarding that aspect of the proposed model. Prior to the formal implementation of the ERM program, resources were also dedicated to create an infrastructure to sustain the recommended model. Faris's role as risk manager was formally revised to create a full-time ERM analyst position within the Office of Financial Management in the Finance and Facilities division and a half-time ERM project manager position was created, filled by Kerry Kahl.

 
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