by Robert A. Scott
In “How University Boards Work,” I discuss best practices in board composition, describe the governance systems in American higher education, give examples of positive and negative board behavior, describe the benefits of “shared governance,” and offer guidance on how boards can better fulfill their duties of care, loyalty, and obedience.
Just as corporate boards require members who know the industry and technology at the core of the company’s business, so too universities benefit from trustees who can contribute substantively to academic planning and decision-making. University trustees are most effective when they know the history, the mission and purpose, the students to be served and the competitive landscape, and the comparative advantages of the institutions they serve. As a consequence, board deliberations are enhanced when they include members who have experience in and knowledge of higher education.
University trustees need to be trained in the complexities of higher education governance, financing, quality controls, government regulations and legal requirements, financial aid policies, and other issues if they are to be effective in their roles. For these reasons, board members should be chosen thoughtfully and provided with an ongoing orientation to their responsibilities.
Trustees may wish to serve because they believe it is time to give back to an institution that was important to them at a critical time in their lives. While this motive is honorable, it is not sufficient. Board service, if done well, is work. It takes energy, imagination, and commitment — not old sentiments revisited. As a consequence, board members should be committed to continuous study for their role.
In my experience, boards are most effective when members know the difference between governance and management, and have the gumption to ask questions about what they do not understand or with which they disagree. Members should collectively have the expertise necessary to guide a complex organization with multiple functions and sources of revenue. Board service is an opportunity for learning, judgment, and setting institutional direction in fulfillment of historical missions and state priorities. It requires time and talent as well as treasure.
Unlike corporations, where there is generally one bottom line, universities have multiple bottom lines. The academic president’s role is different from that of the corporate chief because of the former’s commitment to a mission and a heritage. The corporate chief’s obligation is to the financial bottom line and to shareholders’ financial interests. If a product or service is no longer competitive, there is little constraint in eliminating it.
A university is different. As Bill Bowen said, “While a for-profit board has an obligation to get out of a bad business, a non-profit board (including university boards) may have an obligation to stay in an activity if it is to be true to its mission.”
Academic institutions cannot change their missions so quickly. They have a state charter that specifies the mission and are regulated by state and federal agencies. Yes, they need to change program mix and degree offerings in response to societal needs, and they do so. But such changes must be approved by the state because these institutions are tax-exempt organizations and operate under a set of laws designed to protect the public and the charitable donations of those who support the institution. They must balance the need for being responsive to societal pressures with a legal mandate to fulfill the institutional mission.
In contrast to the goals of a corporation or private business, with short-term profit, market share, and, for some, share price, of primary importance, the goals for an institution of higher education are long-term. Even for fundamental goals, such as increasing the graduation rate or improving placements of graduating seniors in graduate and professional schools, the means for achieving an institution’s goals are complex, multifaceted, and take time. As David Riesman said, the goal of the board is to protect the university of the future from the actions of the present.
Another distinctive feature of American higher education is the role of the faculty in governance matters. While the board of trustees has ultimate authority, it explicitly delegates powers to the president as chief executive officer and to the faculty as guardians of academic programs and standards in a system known as shared governance. Each party has an important role to play in fulfilling an institution’s mission and must work with the others in order to develop the mutual respect and trust necessary to move the institution forward.
Shared governance is not without its challenges. One argument against shared governance is that it slows down the process of making decisions. Another is that those sharing in governance do not share equally.
There are patterns of institutional behavior such as the academic calendar as well as requirements of law that temper the possibility of sharing more fully. Because of this imbalance of power, there are some who have discarded the term “shared governance” in favor of “distributed governance.” Nevertheless, clear and open communication and trust are essential, with “no surprises” as a fundamental value.
Conflicts over governance may occur between faculty senates and trustee boards regarding decisions about tenure and promotion or the approval of new programs or courses. The prevalence of cases in which trustees remove presidents precipitously, appoint presidents without an adequate search and involvement of faculty, increase the number and proportion of contingent or part-time faculty, and reduce budgets because of shortfalls in state and tuition revenue without faculty consultation serve to undermine the ideal of shared governance on all campuses, not just those immediately affected.
As the board guides an institution through the governance process, the faculty’s consent is necessary, and the president must lead with a mixture of authority, power, and moral suasion.