Material risks and opportunities impacting value

Risks that may put our financial stability under pressure were additional expenses and reduced income levels brought about by the Covid-19 pandemic, uncertainties around the proposed fee regulation model, reservations about the sustainability of government’s funding model, an overdependence on a dominant source of income (government subsidies and NSFAS) and student debt.

Capital affected:

Mitigation measures included the acceptance of a financial impact model containing all the mitigation plans included by Council. The mitigation strategies include fundraising and endowment initiatives to ensure new sustainable sources of income, building available reserves to cover one year of operational expenses, building optimal relationships with funders and facilitating start-up capital by the Technology Transfer and Innovation Support office.

Risks in this cluster included insufficient level of diversity in staff and student environments, escalation in sexual and gender-based violence, poor implementation of the unitary business model, uncertainties around the language plan implementation, and difficulty in recruiting and retaining talented staff.

Capitals affected:

Mitigation measures included a well-defined student recruitment and admission process; a scarce-skill allowance; building employment equity targets into the performance agreements of management members; retention strategies; clear position profiles for senior management; diversity targets; an Employment Equity Policy, and language plans for faculties and support departments.

In this cluster, we focused on risks such as a decline in research funding and research, poor financial support to postgraduate students, loss of opportunity income, subsidy and loss of return, limited infrastructure planning for teaching and an insufficient global engagement/internationalisation effort.

Other risks were an apparent lack of preparedness for a blended learning environment, uncompetitive salaries, slow external processes for approval of qualifications/programmes, over and under enrolment, and the perceived inability to meet marketplace expectations if graduates do not find employment quickly enough.

Further risks were declines in student throughput and student success, and the possibility that undergraduate and postgraduate academic offerings and related services may not be sufficiently responsive, price appropriate and of the required quality and standard.

Capitals affected:

Mitigation strategies at play here included a budgetary process to focus on sustaining research, merit bonuses for qualifying postgraduate students who received NSFAS funding during undergraduate studies, strategic funds for postgraduate bursaries and an internationalisation policy, as well as a wellorganised process for cooperation agreements.

With regard to infrastructure, mitigating steps included the Strategic Intelligence committee aiming to redesign the system to ensure effective use of infrastructure; provision for infrastructure planning as part of our budgeting planning, and the establishment of a space management project.

Further actions included an induction programme on blended teaching and the implementation of a blended model aimed at enhancing student access and success.

Measures to improve student success were admission and placement tests to guide admission into second or third choice qualifications, measuring tools to track student success, faculty plans to enhance throughput, and support interventions such as supplemental instruction, group and individual tutorials, student advisors and student support walkin services.

More detail about our mitigation actions is included in our risks register.

Risks receiving attention in this cluster were inadequacies in environmental management and information governance, disaster recovery and business continuity, fraud prevention, the inconsistent application of the Policy on Academic Integrity, and a lack of compliance with health and safety laws and regulations, other statutory requirements, licences and other legal requirements.

Capitals affected:

Mitigation measures included business continuity planning and contingency planning for key processes such as registration, as well as the implementation of the Digital Business Strategy.

Other measures were an audit plan on environmental management, and continual occupational health and safety training, monitoring and awareness campaigns. The 2020 internal audit plan addressed risks around academic integrity. We also have a policy and rules on academic integrity.

In this cluster, the risks were student safety on and off-campus, the possible negative effect of “standardising” student life across campuses and the management of student life in a new structure.

Other risks include inadequate measures to create a welcoming student environment, inadequacies in student leadership skills, and the possibility of student unrest.

Capitals affected:

Mitigation strategies included various security projects across all campuses, awareness and training programmes on LGBTQ+ and other human rights issues, student leadership training, and emergency contingency plans for student unrest.

In this cluster, a risk receiving attention was the fact that cyber security is not addressed adequately, a risk that may increase with our digital transformation.

Other risks included IT provisioning for certain administrative and academic functions not being optimal, and uncertainties around the digital business strategy which could lead to delays in new system design and implementation.

In addition, a possible inadequate disaster recovery plan within IT could halt our operations.

Capitals affected:

Mitigation measures included the implementation of a cyber-incident and execution management system, development of a cybersecurity strategy and using the best-in-class firewall solution.

Other steps taken were the audit plan executed annually by Internal Audit, and institution-wide network access control and penetration testing.
Furthermore, we have an enterprise-wide digital business strategy as part of our strategic positioning.

The commercialisation environment looked into the failure of licensees or spin-out ventures to commercialise, along with commercialisation risks such as the offering of non-compliant service level providers, income not coming to the NWU, and missing out on commercialisation opportunities.

Capitals affected:

Mitigation measures included making provision for an effective financial and operating model and a management structure for continuing education, increasing commercialisation opportunities and finalising the establishment of the Unit for Continuing Education, as well as the policy on continuing education. Commercialisation focused on undertaking due diligence and creating standardised licensing agreements.

Operational risks included the academic project facing challenges around ineffectiveness and inefficiencies of support functions, possibly leading to loss of income and potential growth, loss of staff and negative impact on the reputation and ranking of the NWU.

Other risks were absenteeism and loss of valuable staff owing to low staff morale.

Capitals affected:

Mitigation measures included a project to optimise space management and receipt of a substantial grant from the DHET to optimise our infrastructure development.

We are also to further strengthen our integrated planning for academic infrastructure.