Public Risk Managers Need Access To Power Brokers

While she is fortunate in her job to have access to "an audience at a high level," she said not all risk management programs are yet at the point "where they have a seat at a decision-making table."

To be most effective, she said, public risk managers must be able to "communicate risk management's importance and value to an organization at that level."

The challenge to risk managers of public entities is that those decision-makers may vary among municipalities, she noted.

"They may be the governor, the legislature, the legislature's appropriation committee's staff–depending on who is making recommendations of what programs are important," she explained.

Because the power structure can be so different from one public entity to another, "it's critical to know and understand that," she said. "Many states are organized differently from each other, including where the risk management program is housed. It could be in an insurance department, or in a department of administrative services, or an office of budget, or personnel, for example. It really shouldn't matter."

What is ultimately important is to "understand your program and its value. Then you have to be able to really communicate that value"–and to the right audience, Ms. Peterson said.

"Maybe we need to be better about it," she observed, adding that some of the same issues faced in the corporate world "are even more challenging in public entities."

With enterprise risk management, she said, "at least in the corporate world, if you get the ear of the top person, they truly can mandate."

For example, in the corporate world, a decision-maker can require someone to submit reports, and tie their pay to the task–something that is difficult to do in the public sector, he said.

In her own entity in Nebraska, she noted, there are around 90 agencies of state government–several headed by an independently elected constitutional officer.

"So it's not as if I can go to the governor and he can mandate to all state government," Ms. Peterson explained. "He can't. He can mandate to a set of agencies that report up to him, but there are other branches that are independently elected."

PRIMA TO THE RESCUE

The role of PRIMA, she added, is to help its members–risk managers and pooling employees–with the resources they need to do their jobs more effectively. PRIMA can focus on getting risk managers and risk management programs a seat at the decision-making table, she said.

PRIMA can help by facilitating best practices shared by risk managers who have been successful in the public sector. Those resources can include templates of presentations that were given, or allocation methodologies.

"Getting those things out can help advance risk management within organizations and improve the 'bottom line'–to use corporate language–of government, especially now in challenging times," she said.

She noted that while PRIMA is already doing an excellent job in making resources available to members, budget cuts and travel restrictions mandate that resources be made available in different ways.

While the annual conference itself is a huge resource, "not everyone can travel now, so we have the PRIMA 'cybrary,' where we capture documents and they are available day or night," she said, noting that an advantage with public entities is that most of their work is public and is therefore made available.

"In the public sector," she said, "we have the advantage of being much more willing to share our good work–it's our nature and we're required to if someone asks."

PRIMA chapters make the organization more accessible for some as well, she said.

PRIMA also has a webinar series, an institute taking place in the fall and regional workshops on specific topics.

"There are many ways people can make the most of their membership," she said, pointing out that PRIMA recently created its first Facebook site.

"PRIMA's mission is to be the recognized resource for risk management. Hopefully every action we take, even in these challenging times, is moving us in that direction," Ms. Peterson said.

A DAY IN THE LIFE

As risk manager for the state of Nebraska, Ms. Peterson said she is responsible for three primary areas:

o Insurance for all state buildings–more than 3,000 in total–as well as personal property, vehicles and employees.

The facilities–including state office buildings, park and recreation structures, historic sites and prisons–are covered with significant self-insured retentions and excess insurance, she said.

She added that Nebraska may be unique in that its program has an underlying primary layer of insurance as an all-lines aggregate–including auto liability, real property, foster parent insurance and employee dishonesty.

o Workers' comp for all state employees, including universities and state colleges–about 32,000 employees as well as seasonal workers.

o Claims against the state, such as tort claims for general liability, miscellaneous claims, contract claims and claims where state employees may be sued related to their job.

Employees are covered unless there is found to be a criminal act or significant wrongdoing on the part of the employee. The same goes for medical malpractice covering doctors working in the state's facilities, such as prisons, regional centers and developmental centers, she said.

Meanwhile, the state's risk management department has only three full-time employees overseeing exposures facing state employees, billions of dollars of property and about 6,000 vehicles.

Helping them are contractors who work for the state. For example, the state is self-insured for workers' comp and hires a third-party administrator with 10-to-12 employees to manage its comp program.

A similar situation exists for other liability types of claims, and several contractors assist with safety and training, she said.

Before becoming a risk manager, Ms. Peterson served as general counsel for the Department of Administrative Services, of which risk management is a part. When the risk manager left the job nine years ago, she said, her boss urged her to take the position.

She has been risk manager for almost nine years now and said she likes the job, adding that being an attorney is a big advantage.

"It helps to be able to analyze claims without some of the [legal] assistance we would need," she said, adding that the state Attorney General's Office has designated her as special assistant attorney general for the purpose of subrogation.

Ms. Peterson said she became involved with PRIMA almost immediately after being named risk manager. She also is treasurer of the State Risk and Insurance Management Association–STRIMA.

Nebraska was already a member of PRIMA, and some PRIMA members were helpful in getting her acclimated. Ms. Peterson co-chaired the external affairs committee and went solo as the committee's chair the following year. After that she ran to serve on the board and then ran for president-elect.

"Now, here I am," said PRIMA's new president.