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Volume 31, Issue 2

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According to a Wall Street Journal article (see Penn State Warned On Accreditation at http://online.wsj.com/article/SB10000872396390444318104577589174048808462.html?mod=ITP_pageone_1 ), "Pennsylvania State University's accreditation is "in jeopardy," one of the nation's primary accrediting groups warned the school, in the latest fallout from the Jerry Sandusky child-sex-abuse scandal. "

The Middle States Commission on Higher Education, the WSJ reported, "said there was 'insufficient evidence' that Penn State was complying with standards related to governance and integrity, as well as meeting financial obligations. "

Should a risk management practitioner have seen this coming? Or is the threat just another "black swan" that no one could have anticipated?

Does the university even HAVE a risk management program; I'm not asking about business continuity or disaster recovery, I'm talking about comprehensive, enterprise risk management.

Sex scandals - and the Jerry Sandusky issue is very much a "sex scandal" - are nothing new; just ask the Roman Catholic church. Likewise, penalties in the millions of dollars are not new.

Somewhere the school's policies and procedures had a loophole that apparently allowed Sandusky's alleged crimes to go unreported to the proper authorities. Had an experienced risk manager been privy to the school's P&Ps, the loophole might have been discovered and eliminated. Had it been eliminated, most of the scandal also would have been avoided.

Once the scandal broke, an experienced risk manager - working with university legal, PR, and administration personnel, might have been able to mitigate some of the publicity and legal attacks.

Ellen Chaffee, a senior fellow with the Association of Governing Boards of Universities and Colleges, told the WSJ that "the chances of Penn State losing its accreditation are 'extremely remote.'" 

For all that, the school's reputation has been hurt, it's sports programs have been  severely damaged, and its coffers raided.

For want of a nail.