In the past, reputation was often regarded as an intangible business asset, one that is difficult to quantify. For an educational institution, however, reputation is everything. You live and die by it.

In the case of government-run institutions such as public schools, the reputation of the system as a whole is largely what affects your individual standing.

But for a private higher education provider such as a private college or university, reputation is one of your most valuable assets. It is largely what determines your ranking and profitability.

As a result, reputation loss can be devastating, leading to failure to attract funding, sufficient numbers of students and quality teaching staff.

Australian private higher education is now a major export industry and the reputation of these institutions is determined by factors such as the standard of the education provided, the quality of the teaching staff, and the facilities and resources on offer.

Recent pressures on these institutions include an increase in competition, the raising of global standards, demand from stakeholders for reduced costs and higher productivity and increased financial outlay for new technologies.

Indicators that reputation is at risk can include poor administration practices, decreasing funding, lack of motivation amongst staff, a rise in complaints from students or bad publicity.

While educational institutions cannot totally prevent damage to reputation, they can substantially mitigate it by undertaking risk management training.

Advance planning can identify risk factors, estimate their impact and come up with ways to overcome or limit it substantially.

Risk factors can be external, and largely beyond the institution’s control, or internal, and more easily addressed.

External factors include economic downturn, natural disasters, changes to regulations, changes to the political environment or lack of community and parental support.

They can also include cultural factors, as evidenced by the recent collapse of the Indian student market in Australia due to a series of racially motivated assaults in the wider community. With around 600,000 International students in Australia in early 2010, this is a substantial market that racial intolerance could easily jeopardize.

Internal risk factors include lack of policies and procedures, inadequate internal controls, non compliance with regulatory issues, poor supervision of staff and students, poor leadership, lack of crisis management planning, a divided board, lack of training and poor communication.

Once risk factors have been identified, they can then be managed in a variety of ways. Examples include making careful employment decisions with the institution’s reputation in mind, establishing good relationships with local media and using discretion (choosing not to participate in certain areas that may highlight weaknesses).

You could also consider adding moral or ethical clauses to your organisation’s bylaws, creating a whistle-blower policy, making financial statements available to the public via your website and instituting and monitoring fraud prevention controls.

An educational institution faces many challenges and virtually all of them can affect its reputation, which once lost, can take many years to repair. It is therefore vital that administrators undertake risk management courses and give reputation, their most valuable asset, the highest priority.

“It takes 20 years to build a reputation and five minutes to ruin it. If you think about that, you’ll do things differently.”