A couple of weeks ago, Paul Fain wrote a piece for this newspaper entitled “Tight Times Call for Trustees Who Push Back, Presidents Say.” He was reporting on the annual meeting of the Association of Governing Boards of Universities and Colleges, at which there seems to have been agreement that in this time of economic crisis, “boards need to play a significant role in helping colleges restructure.”
But at least some of the participants argued that “tight times call for strong support from trustees. . . . Board leaders should speak up and defend university leaders after the board has worked with administrators to make tough adjustments.”
I think the question is whether we can have it both ways? If boards really lead the way in making hard institutional choices, they will find it hard to defend administrators who disagree with them — although to the extent that boards are complicit in making the hard choices with administrators they will only be defending their own policies.
I think there are two issues here. One is the extent to which governing boards of colleges and universities are (or can be) active participants in policy formulation. The second is whether the primary obligation of the board is to support the CEO. In this post I want to deal with the first issue.
Historically, American institutions of higher education have relegated to their boards real decision-making participation on non-academic issues such as financial affairs, buildings and grounds, and the like. They have given trustees merely formal authority over promotion and tenure, and other academic policies, while permitting administrators and the faculty to be the effective decision makers in those areas. But now come hard times, when this functional separation of powers may not work so well. These days financial decisions are likely also to be substantive decisions about academic policy. Can trustees rise to this challenge? Should they be permitted to decide these issues?
If we are to look to governing boards for substantive input into academic policy issues, we may have to change our notions of board composition. The financial-legal-business skills we have traditionally sought in trustees (at least in the private sector of higher education) are not sufficient to the task. In my experience (and I was a university trustee for 12 years), many boards simply do not understand the purpose and functioning of the institutions they “govern.” We have long lived with the pretense that boards are more competent than they are in fact, but these days that pretense is wearing thin. The problem is generic to nonprofit institutions, and there is reason to think that the current world financial crisis demonstrates that the same problem exists for the commercial sector. If so, what can we do to select trustees and directors more wisely, and to equip them better for their governance duties?
The old saw is that boards of trustees should be handled like mushrooms — with very little light and lots of liquid. But that will not do if they are truly to be “the deciders.” Don’t we need better governing boards?
