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$: Globalization: Developing Your International Risk ...\2014\BSD\17\NicheName\20\DCN#.pptx Community College Risk Management Consortium July 23 –24, 2015 Globalization: Developing$
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Community College Risk Management Consortium

July 23 – 24, 2015

Globalization: Developing Your International Risk Management Plan

Innovate, Collaborate, Motivate . . . Solutions that Work

Paul D. Pousson, ARM Lisa Zimmaro, Esq.Area Senior Vice President AVP Risk Management & TreasuryArthur J. Gallagher & Co. Temple University

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Objectives

• Confer on trends and challenges associated with global activities and initiatives

• Describe the health & safety, business and financial issues associated with these activities and initiative

• Discuss effective risk mitigation techniques

• Share thoughts on how to create an international risk management plan for your institution

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• Mission, goal and objectives of your institution’s international program(s)

• Primary activities

• Key stakeholders

• External influences

• International oversight– Coordination and collaboration– Planning and direction

Risk Management Context


Questions to Consider

• How do you perceive risk as a risk manager?

• How about your study abroad director?

• What is the risk tolerance level at your institution?

• How are you working together now?


Yay! Amazing history, ancient monuments, fascinating cultures….

International Educator Risk Manager


Trends & Challenges

• Short Term (< 8 weeks) Travel is very popular

• Travelers want to go to “risky places”

• Sponsored Travel vs. Independent Travel

• Travelers distracted by devices are unaware/oblivious of surroundings


Trends & Challenges (continued)

• What is the College’s position on extracurricular activities?‒ Has a position been taken? ‒ How will you respond if a student/faculty member is injured

while participating in an extracurricular activity?

• Affiliated colleges & universities provide housing for US students‒ The College’s fire & life safety standards maintained in the US

are a challenge to impose on owned/leased housing maintained abroad


Faculty/physicians/staff/graduate students

• Field research• Teaching, Consultative

services• Conference attendance• Project work• Clinical trials• Federal contracts & grants

Sponsored travel• Research assistance• Conference attendance• Overseas satellite campuses• Alternative spring break

(official)

Study Abroad• Faculty‐led programs• Internships/Externships• Direct enrollment• Provider• College‐operated study

centers• Independent research

Examples of Programs & Activities


Health & Safety Issues

• Crime (rape, pick pocketing, robbery, sexual harassment, assault)

• Kidnap/Ransom/Extortion• Fire• Natural catastrophes• Civil and political unrest• Injury/Illness/Disease


Health and Safety Issues (cont.)

Program Should Include

• Required Traveler Orientation

• Required Waivers & Releases ‒ Assumption of Risk and

Release

• Medical Forms‒ Who holds them? ‒ Privacy Issues‒ Does an internal staff member

prescreen and clear traveler? ‒ Is this person a trained medical

provider? • Get MD Clearance


Health and Safety Issues (cont.)

Immunizations Insurance

• Does the College pay for its travelers?

• Staff & Faculty only if traveling on CollegeBusiness?

• Sufficient planning in order for vaccines to take effect

• Evacuation• Repatriation• Personal Health• Business Travel Accident• Personal Property• Exclusions • Watch overlap by Providers


Excursions

• Nature, frequency & duration of activities

• Lodging• Security• Transportation• Risk assessment• Participant training• Waivers & releases


Crisis Planning & Communication

• Registration with local US embassy• Emergency communication plan• Evacuation procedure

– Medical emergency– Security– Natural catastrophe


Business Issues: Contracts

• The nature, scope, and structure of the activities under consideration

• How the prospective affiliation/contract will benefit the institution and advance its mission

• The college’s capacity and ability to conduct and manage the contemplated activities without diverting resources or detracting from other established priorities

• The extent of the college’s investigations into the suitability, reliability, and past dealings of the prospective foreign partner, including any relevant information on its finances and organizational and management structure

• Verification that Counsel’s office reviews contracts


• Due Diligence ‒ Third party provider is legitimate and a good business partner

• Is the college registered or otherwise qualified to do business in this country?

• Direct Registration, Branch Office, Wholly Owned Subsidiary, Local NGO

• Are their any US Government restrictions on conducting activities in this country (e.g. Cuba, Iraq)?

Business Issues: Due Diligence, Registration / Legal Status


Real Estate• Own v. Lease space – office,

classroom / lab, housing (staff, students)

• Execution of lease documents

• Building codes & ordinances• Security• Personal property• Risk assessment

Employment• Expatriate Employees

– Establishing legal status in‐country

– Immigration status in host country

– ADA– ADEA – Title VII– Duty of Care

• Foreign National Employees

Business Issues: Real Estate & Employment


• Air, Land, Water• Owned • Hired/Non‐owned

– Rental– Charter

• Public transportation

• Student / Faculty driver authorization?

• Use of 15 passenger vans?

• Traveler should be aware of foreign laws and regulations

• Transportation accidents ‐leading cause of death and injury for healthy Americans traveling abroad

Business Issues: Transportation


Business Issues: Insurance

• Insurance‐ Domestic/Foreign WC, Auto, Property, 3rdParty Bodily Injury and Property Damage (GL)

‒ Depending on the country you may need a local policy‒ Confirm your domestic policy covers international losses if this policy

is being considered as an excess policy

• Property‒ Owned/leased space‒ Business interruption


Financial Issues: Risk Management

• Funding Source

• Internal controls

• Foreign Bank Accounts‒ Who has access?

• Foreign Currency‒ Paying foreign staff in local

currency vs. USD direct deposit‒ Exchange rates‒ Are travelers taking cash with

them or getting it there from an ATM?

• Corporate income tax

• Employment tax ‒ (local, expatriates, independent contractors)

• Arrangements for Carrying Large Sums‒ Not all countries accept credit

cards

• Accounting for Expenses upon Return

• “Tip vs. Bribe”‒ Smith & Wesson Corporation


Other Compliance Considerations

Risk: Running Afoul of U.S. Laws Extra‐Territorially Applied

• Foreign Corrupt Practices Act• U.S. Export Controls• U.S. Embargo / Sanctions Programs• Anti‐Boycott Regulations• Anti‐discrimination & ADA• Title IX• Clery Act• Data Privacy• Numerous others


Risk Mitigation: International Oversight

• Committee– Academic Deans/Associate

Deans/Senior Faculty with significant international experience

– Health Center Medical Officer– Senior Student Affairs staff– Senior Public Affairs staff– Senior International Officer– Director of Travel Office– Representative from Provost’s Office– Representative from College

Counseling Center – Ex‐Officio (non‐voting) Members

• Senior Legal Affairs staff / General Counsel

• Office of Study Abroad Director• Business Officer / Risk Manager

• Responsibilities– Evaluate information presented by

responsible party– Restrict or suspend international

travel to countries/regions with heightened health, safety, and/or security concerns

– Grant exceptions to decision to restrict or suspend travel due to special circumstances

– Manage/respond to critical incidents abroad, including decisions on emergency evacuations and emergency policies and protocols

– Expand role to address broader international risks & exposures


Risk Mitigation: Travel Inventory

• Data request to all institutions (spreadsheet)

• Institution and country‐specific• Number of trips greater or less

than 30 days• Number of students• Number of employees

• Activity & Purpose of Trip• Number of car rentals,

charters, etc.• Owned / leased properties• Similar information for federal

contracts


Risk Mitigation: General

• Get travelers to follow the rules by tying funding/reimbursement to policy compliance

• Initial program approval contingent upon itinerary review by:

‒ Study Abroad, Provost, Counsel’s Office?

• All travel plans must include crisis/disaster/emergency response


Risk Mitigation: General

• US State Department warning list

• What is your college’s planned response “script” for travelers who wish to go to countries on the DOS warning list.

‒ Need a planned response in advance

• Distinguish permission between faculty, staff and students

• Have a plan in place when to cancel, postpone or make travelers return

• What’s your response when a traveler says “No, I won’t come home.”?


Risk Mitigation: Well Qualified Leaders

• More than one leader should travel with group

• Leader qualification should be in trip proposal

• Identify student/staff ratios

• Ideally, mandate leader training; how to enforce?

• Must be well versed in college policies

• Know how to respond to common issues‒ Mental health‒ Alcohol


Risk Mitigation: Partners Abroad

• Cannot do Background Checks

• References

• Take Advantage of Relationships

• Beware of new substitute contacts in danger zones or unfamiliar places


Parent Involvement

• Encourage parents to be informed and to be involved in the decision of a participant to travel abroad.

• Obtain and review program materials

• Make sure students and parents know what the “deal breakers” are that will have students expelled from the program and sent home.

• If possible, get parents to participate in pre‐departure orientation.

• Discuss safety, behavior, insurance, and emergency procedures with the participants to make sure everyone understands.


Informed Consent

• The student and parent or guardian (if the student is under 18) are required to sign an Informed Consent document and Assumption of Risk and Release Waiver when traveling overseas on college sponsored programs.

• This includes permission to act on behalf of the student in the event of a medical emergency.

• Consider having students re‐sign the student code of conduct when they arrive at the destination


Informed Consent (cont.)

Informed consent form should contain statements regarding:• School cannot guarantee the safety and welfare of the participants or eliminate all risks;

• Cannot monitor or control all of the daily personal decisions, choices and activities of the individual participants;

• Cannot prevent participants from engaging in illegal, dangerous, or unwise activities;


Informed Consent (continued)

• Cannot guarantee the U.S. standards of due process in legal matters;

• Will not provide or pay for legal representation on behalf of the participant;

• Cannot assume responsibility for the actions of non‐employed agents of the program, or those who are beyond the control of the program sponsor and any subcontractors; and

• The college is not responsible for situations that may arise because the participant failed to disclose pertinent information.


Risk Management Context• Mission, goal, and objectives of

your institution’s international program(s)

• Primary activities• Key stakeholders• External influences

• International Oversight– Coordination and collaboration– Planning and direction

Intent and Scope of the Plan• Health and safety• Student activities• Employment activities• Independent contractors• Crisis planning and

communication• Transportation• Institution liability• Banking/cash management• In‐country registration / legal

status• Ownership / leasing of real estate

Action Plan Development


Identify the risks• Source

• Exposure (people, property, brand, financial, continuity of operations, compliance, etc.)

Analyze the risks• Risk analysis matrix

• Likelihood and consequence for each risk

Complete the matrix

Mitigate the risks• Accept

• Avoid (e.g. removal of physical hazard, implement age restrictions, prohibit certain activities, etc.)

• Reduce (e.g. develop policies & procedures, provide training, contractual risk transfer, etc.)

• Transfer (e.g. insurance, waivers, etc.)

Action Plan Development (cont.)


Action Plan Development (cont.)


Risk Management Action Plan

• Risk inventory

• Action taken to mitigate each risk

• Completion date

• Responsible party

• Resources necessary

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• Risk management is about exploiting opportunities as well as preventing problems (upside and downside risks)

• It is tied to academic, research and service objectives and strategies – and supports them

• It applies to all levels of the organization and to all activities

• Efforts should be focused on risk intelligent decision making

Key Concepts


Questions? Paul D. Pousson, ARMArthur J. Gallagher & Co.

Lisa Zimmaro, Esq.Temple University

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