The Secret of the Best: The Practice of Risk Management in Brazilian Educational Institutions

Introduction

The topic of governance dates back to ancient times. The term governance can be broadly defined as a complex decision-making process that anticipates and transcends government (Rodhes, 1996). But it is from the administration of private organizations by third-party agents that its concept was delineated in the sense of presenting regulatory principles to secure the interests of investors and owners. Since then, the term has expanded in meaning and achieved trustworthy status, gaining the title of Corporate Governance and becoming present in the various actions of private and governmental institutions around the world. According to Bhatta (2003), corporate governance in the public sector refers to the management of public institutions through private sector corporate governance principles, adapted to the reality of state agencies.

In this historical path, the global crisis of the 1980s demanded a reformulation of the State's role in the economy in order to increase its credibility and efficiency. To this end, a new global discussion began, whose agenda indicated the expansion of the principles of Corporate Governance to the public sphere, that is, the systematic construction of a regulation of the roles and responsibilities of the organizations' managers in order to minimize the impacts of conflicts of interest. This means that governance mechanisms should be instituted in the public administration in an attempt to ensure that the objectives of the owner/principal, citizens, are achieved and preserved.

Thus, in recent decades we have seen significant contributions from multilateral and private institutions such as the World Bank, the Organization for Economic Cooperation and Development (OECD), the International Monetary Fund (IMF), the International Federation of Accountants (IFAC), and the Brazilian Institute of Corporate Governance (IBGC). It is important to recognize these contributions with emphasis on the insertion of corporate governance practices, favoring the consolidation of basic governance principles in public administration shared worldwide. This systematization of good governance practices continues to be on the agenda of organizations such as the World Bank, the IMF, and the OECD (TCU, 2004) with a view to making public service more efficient, ethical, and committed to the real interests of society.

Public Governance in Brazil has a milestone in the 1988 Federal Constitution and, since then, a series of legal documents have been reformulating the organization of state agencies in order to improve governance practices in public service, such as the Fiscal Responsibility Law; the National Program of Public Management; the Access to Information Law; among others. Besides these legal instruments, other independent institutions, such as the IBGC and the Tribunal de Contas da União - TCU, contribute to the acquis on the subject, with periodical publications such as the Code of Best Corporate Governance Practices (IBGC) and the Basic Governance Reference (TCU) that serve as models and samples of good practices that can be incorporated in public instances.

More recently, with the recommendation expressed in the 2014 judgment of the TCU, the topic occupied definitive space in the government agenda, inserting the theme in Brazilian legislation with the publication of the joint Normative Instruction MP/CGU of 2016, which determines that “the agencies and entities of the federal executive branch shall adopt measures for the systematization of practices related to risk management, internal controls, and governance” (Art. 1^o of IN 01/2016) and of Decree 9,203/2017, which “provides for the governance policy of the direct federal public administration, autarchic and fundamental” (Art. 1^o of Decree 9,203 of November 22, 2017). Among the guidelines described for the materiality of what was put, the documents present risk management as a fundamental process, without which the practice of governance is not effective, since the mapping of possible events that may compromise institutional activities ensures quick and preventive decision-making to nullify or mitigate errors and problems, thus promoting more satisfactory results as to what is desired.