In this, the sixth in our series of articles with insights from Robert Scott, President Emeritus of Adelphi University and senior advisor to Grant Thornton’s Higher Education practice, we discuss the meaning of governance; the roles of the board, president and faculty; and tools for effective governance.
In recent years, we have witnessed scandals and governance disruptions at public and private universities across the nation. In some cases, the president may have provided inadequate information to the board, or the audit committee may not have asked the necessary questions. Consequently, the board would not have provided adequate oversight. This is particularly true when the leadership of the campus or the board is focused on preserving or enhancing the institutional “brand,” or ranking or athletic prowess, instead of fostering academic excellence and student success. In these cases, institutional ambition can lead to a lack of transparency, a loss of integrity, an inability to admit mistakes and defensiveness in the face of legitimate questions.
Effective boards and presidents foster a culture of conscience, open critique and collaboration. But some have instead become more focused on the basics of compliance and preserving the campus reputation at all costs.
The most helpful board members bring questions to meetings or ask them beforehand. They have read and thought about the materials sent in advance and have studied effective governance in journals such as Trusteeship and discussed their governing role at conferences such as those sponsored by the Association of Governing Boards.
The meaning of governance
Governance is the process of reviewing, approving, monitoring and assuring the alignment of mission or purpose, goals and plans, strategies and alternatives, priorities, resource allocations, rewards and results, e.g., timely graduation rates. The mission or purpose is part of the state-approved charter, and its fulfillment is the basis for regional accreditation. Rewards include items such as released time from teaching for faculty and any other special awards.
Institutional governance includes the roles and responsibilities of the board of trustees, the president and the faculty. The board delegates particular authorities to the president and the faculty in a system called shared or distributed governance.
The roles and responsibilities of the board
The roles and responsibilities of a board include overall fiduciary responsibility for public trust in the institution by adhering to the duties of care, loyalty and obedience.
The duty of care relates to the level of competence expected of board members in carrying out governance responsibilities. They do this by exercising a degree of diligence and skill one would expect of a prudent person fulfilling such an assignment. It is their duty to prepare carefully for board meetings and participate actively in board discussions in order to protect the institution through appropriate oversight. The board’s role is to identify and oversee the management of risks.
The duty of loyalty requires board members to act in good faith and in the best interests of the institution, not out of self-interest or in the interest of a particular constituency. This duty specifies that a trustee should not have mixed loyalties but instead has pledged allegiance to just one institution at a time. This is the basis for avoiding conflicts of interest.
The duty of obedience requires that board actions be true to the campus charter and intended to fulfill the state-approved mission of the institution in a manner that complies with the law. This duty is based on the premise that constituents and the public at large can trust that what they are told by the board is true.
It is important to understand that the role of governance is to set the goals, direction, limitations and forms of accountability, while the role of management is to execute strategies, allocate resources and oversee the day-to-day operations in fulfillment of the mission and goals. Governance determines “what” and management determines “how.” It is best to have frequent and open communications between the president and the board.
An effective board has a philosophy or a set of principles to guide it in fulfilling its role. These principles include the following:
- Mission first
- Delegation of responsibility to those closest to certain issues, including president and faculty
- Questions, not prescriptions
- Prepared, not impromptu
- Participation, not domination
- Trust and transparency, not suspicion
- Rigorous but civil discussions
- Institution first — not particular constituencies — whether elected by alumni or the faculty
- Forward-thinking, including board and committee agendas, building on history or heritage
- Mission-focused, student-centered, market-smart and data-based goals
- Support for the president in executing strategies to achieve board-approved goals
- Guidance by best practices
- Each board member having the institution as one of their top three philanthropic priorities
- The board speaking with one voice
- The board not taking a corporate stance on political or social issues, but rather supporting free speech, academic freedom and civil discourse — constrained by virtue of legal standing, tax-exempt status and avoiding influencing constituents
Each board should adopt a statement of expectations that serves as a compact between each member and the board itself as well as with the institution. The board sets the standards for institutional deliberations.
The responsibilities of the president
The president is responsible for fulfilling board-approved plans in a legal, ethical and financially sound manner. This includes responsibilities for revenues, expenses and assets, and assuring a campus climate committed to openness and equitable treatment of all persons. The president is not only the institution’s CEO but also the chief mission (or purpose) officer (CMO). For the CMO, student achievement is paramount — students are enrolled as learners in a supportive environment, not customers engaged in a transaction; and faculty are partners in fulfilling the institution’s mission, not simply employees with a job.
The responsibilities of the faculty
The faculty has primary responsibility, as delegated by the board, for the curriculum and methods of instruction; research, scholarship and creative activity in their professional fields; new faculty recruitment and retention; proposing degree programs and requirements to the president and staff to consider for board approval; recommending candidates for degrees upon fulfillment of requirements; and aspects of student life related to the educational process. Student academic advising is a central function of teaching.
The faculty is responsible for maintaining institutional and programmatic accreditations, participation in strategic and comprehensive planning and the setting of priorities, and serving on search committees for senior administrators.
Shared governance across the 3 parties
Shared or distributed governance gives each of the three parties to campus governance a share in key decision-making, often through elected representation, and gives certain constituents the primary responsibility for specific areas of decision-making. It does not mean co-equal authority; not everyone participates at every stage of decision-making. It is neither a set of rules of engagement nor a set of boundaries.
Shared governance requires a collective sense of purpose and commitment to a vision, a culture of meaningful engagement and collaboration, and good faith efforts to share information in a timely way. It requires trust, open communication and a commitment to the discussion of critical issues. Typically, part-time faculty, staff, students, alumni and bondholders are not parties to shared governance.
Comparing collegiate governance to corporate governance
While collegiate governance shares some characteristics with corporate governance — especially in the duties of care, loyalty and obedience — it is largely distinctive due to the delineation of roles and responsibilities. For example, the late David Riesman said the role of the board of a state-chartered college or university is to save the institution of the future from the actions of the present. An extended view, rather than a short-term view, predominates.
Higher education governance gives priority to long-term concerns for the institution’s mission and stakeholder interests rather than to short-term priorities benefiting managers, shareholders or owners, as is often the case with business boards. Higher education boards have multiple “bottom lines,” unlike most businesses.
College and university boards are also different from business boards in the separation of the roles of board chair and chief executive, the expectations of their selected leader, the characteristics of their constituents, the context in which they govern and the measurements of success. Of special note is the relationship to students. While businesses generally engage with customers in transactions, a college’s mission is to engage students in a transformational experience through the advancement of knowledge, skills, abilities and values. College and university missions and goals are as much about character and citizenship development as they are about the preparation for careers and engagement in commerce.
Nevertheless, higher education boards and leaders must be adaptive and flexible even as they are anchored in the mission and values of the institution.
The special mission of higher education was enumerated in a 1957 U. S. Supreme Court ruling in which Justice Felix Frankfurter stated:
“. . . It is the business of a university to provide that atmosphere which is most conducive to speculation, experiment and creation. It is an atmosphere in which there prevail the four essential freedoms of a university — to determine for itself on academic grounds who may teach, what may be taught, how it shall be taught, and who may be admitted to study.” Sweezy v. New Hampshire 354 U.S. 234 (1957).
Barriers to effective governance
Among the barriers to effective campus governance are uninformed trustees. In higher education, public institution boards are appointed through a political process usually involving the governor and legislators. Independent, or private, institution board members are often selected because of philanthropic capacity. In neither case is governance acumen a major criterion. To ensure a mission-based stakeholder model for deliberation, some higher education boards include as members a senior academic or two from noncompeting institutions. Ongoing orientation and training are essential.
Another barrier to effective campus governance is presented by presidents who think of themselves as CEOs instead of as CMOs. The CEO role places money over mission as a priority, scale and scope over student success, delegation over engagement, faculty as employees rather than partners in mission, and students as consumers rather than as learners.
It also is true that campus boards and presidents generally do not provide training in leadership and governance for faculty members. We expect their participation but do not prepare them for these roles.
Other impediments to effective governance include the academic calendar in which one quarter of the year is given to the summer session, a focus on process that at times overshadows substance, suspicions fostered by a lack of timely information and transparency, and confusion of faculty roles in a collective bargaining environment. The collective bargaining agreement is about terms and conditions of employment, not the faculty’s role in governance.
Tools for effective governance
Each institution has a set of tools for effective governance, including the following:
- Bylaws, including an annual review of board and committee bylaws and charters
- Faculty handbook
- Trustee orientation, faculty leadership orientation and training, orientation for student representatives to board and committee operations and protocols
- Engagement of board members, senior administrators and faculty leaders in discussions of governance
- Periodical assessment of the state of governance and the development of an action plan to strengthen it
- Support for strong faculty governance of the academic program
- Commitment to three-way transparency and frequent communication
- Development of deliberate ways to increase social capital between board members and members of the faculty (lunches, dinners, receptions, etc.) but not encouraging “end runs” around the president, vice presidents, deans, etc.
With commitment to the mission and dedication to the institution’s well-being by all three parties, the most essential and strategic issues confronting an institution can be addressed successfully.
In this series, Robert Scott mobilizes his expertise and insider understanding of higher education to help boards be better equipped to face new challenges. See the previous articles, starting with the first — “Rethinking revenues, preserving resources in higher education.”
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Dennis J. Morrone
National Managing Partner, Not-for-Profit & Higher Education Practices
Dennis Morrone is the National Managing Partner of Grant Thornton's Not-for-Profit & Higher Education Practices.
Iselin, New Jersey
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