24 Nov 2021 15:33 IST

Too few risk-literates in India’s workforce, says IRM-AICTE study

81 per cent of higher education institutions think their students lack risk literacy.

Nearly 81 per cent of higher education institutions think their students do not have high risk literacy, according to the Institute of Risk Management (IRM) India Regional Group and AICTE study. About 96 per cent of the responding institutions considered risk literacy as critical for both organisational and personal success. Yet, only 27 per cent of institutions believe Enterprise Risk Management (ERM) courses should be offered at the undergraduate and postgraduate levels.

The publication ‘Enterprise Risk Management and the Indian Higher Education System’ drew responses from over 1,000 institutions in India, and the initiative aims to engage with higher education bodies to help them to improve risk management education.

The research was led by Dr Shashank Shah, SAI Fellow’17, Harvard University, Board Research Chair, IRM India Affiliate; and Dr Sapna Malya, Associate Professor - Finance, SPJIMR, Project Co-Chair, IRM India Affiliate.

Risk preparedness

Given that 60 per cent of the respondent institutions were affiliated with universities that exercised control over their course framework, there was a general consensus on the need for regulations that emphasise better risk education, for improving risk literacy among students. This was evident as 82 per cent of the study participants believed that academic regulators mandating a formal ERM framework would help the teaching-learning process.

The lack of risk preparedness extends to the institutional level, with only 37 per cent employing a dedicated risk officer or faculty to advise the school’s leadership team on institutional risks.

“The survey reveals a worrying gap between the need for ERM and the risk literacy of India’s graduate and post-graduate students. We must urgently strengthen the curriculum framework to promote ERM education across higher educational institutions. There must be a sustained and systematic process to ensure the inclusion of new and emerging courses on the subject as well,” said Hersh Shah, Chairman, IRM India Regional Group.

Key findings

45 per cent of responding institutions do not have industry experts to deliver courses in the risk management subjects. Among the institutions that offered risk management courses, 72 per cent said that their full-time faculty were engaged in teaching these programmes. Of these, 11 per cent of the respondents said that their risk-teaching faculty held IRM qualifications.

However, there is a severe paucity of academia-industry collaborations, with only 12 per cent of the respondents being able to provide industry-linked risk management internships to their students. Not surprisingly, almost half the respondents believed that the current educational framework was insufficient to equip their students to meet the emerging demand for risk-intelligent professionals across different sectors.

“Although the corporate world is now taking a proactive approach towards strengthening their risk management frameworks, academia is still, unfortunately, lagging behind,” said Prof Anil D Sahasrabudhe, Chairman, AICTE.