ACTA, the American Council of Trustees and Alumni, recently hosted a gathering at the American Enterprise Institute in Washington, D.C. for people interested in education issues within the local public policy community. In the audience were folks from special-interest groups, think tanks, government agencies, non-government organizations, the media and others. The announced agenda was “Higher Education Governance: Stewardship or Sham?”
The preface to the agenda reminded us of an assortment of controversies which arose in the last couple of years on America’s university campuses that gained national attention. Cited were the usual: the famous resignation in 2005 over the use of university funds by American University president Benjamin Ladner; the struggle over the governance of Dartmouth College, in which the board of trustees disputed the size and role of their membership; and, most immediately, the issues over student loans and study-abroad programs suggesting that academic administrators were behaving in questionable if not felonious ways. It promised to be a full morning.
The American Council of Trustees and Alumni is generally thought of as a conservative group, critical of many contemporary campus practices, so I went anticipating an agenda with a pre-determined point of view and attitude, and I was pleased to discover that the questions raised and the speakers’ dialogues were mostly objective—something not always the case in Washington, where partisanship and advocacy sometimes trumps fair-mindedness.
The first panel, moderated by Frederick Hess from AEI, addressed the question, “Why all the Scandals?” Michael Dannenberg of the New America Foundation, Benjamin Lawsky of New York State’s Attorney General’s office, and Paul Fain from The Chronicle spoke to that question. I came away thinking that in some ways universities are suffering from the introduction of higher standards than had ever previously prevailed. Behavior that was either condoned or ignored in the past is now viewed in our post-Enron environment with a keener eye. While technically Sarbanes-Oxley standards do not apply to not-for-profit organizations, trustees—particularly lawyers and corporate executives who serve on university boards—are bringing their professional perspective to their work as trustees, and the performance expectations have become more refined and articulated. Those responsible for the oversight of institutions of higher education are more and more sensitive to their fiduciary responsibilities and expect their university administrators to behave sympathetically. Moreover, government officials at the federal and state levels, both out of a sense of responsibility and political opportunity, have institutions of higher education in their sights.
This isn’t to say that all colleges have been operating in some sort of shoddy manner. On the contrary, most administrations are extremely fastidious. However, the parameters of what was considered normative have constricted and new boundaries are in place, ones that at first blush seem to limit administrations and faculties. Of course, once the new becomes the norm, it will be old hat. We need to be careful, however, not to over-react, not to quash donor generosity, or mindlessly desist from doing business with all trustees or listening to self-interested third parties. We do need to be careful when doing any of these things, to keep a careful eye on full-disclosure, transparency, on seeking advice and getting a second opinion, of not having single sources for purchases, services, hires, and the like.
The second panel, moderated by Anne Neal of, asked, “Where are the trustees?” Richard Legon, from the Association of Governing Boards, University of Nevada law professor Nancy Rapoport, and Dartmouth trustee Stephen Smith indicated that trustees were refining and enhancing their oversight roles. This was a natural outgrowth of the first panel, and is particularly imperative because universities are being squeezed by the need for more non-tuition funding on the one hand, and reduced opportunity for finding alternative income on the other (with “the usual” allowances made for the defined generously endowed institutions which are liberated from conventional economic restraints). So the search for revenue and undercapitalization inspires universities to seek resources where they can, even as trustees and their audit committees are keeping a keener eye and acting more vigorously as super-egos of their institutions. Trustees increasingly worry about the bottom line, but they also worry about the good name of the universities they serve, seeking to avoid the sorts of representational embarrassments that have blackened the reputations of various institutions over the past several years. Universities can accommodate sin but they despise scandal.
Batting third was a panel directed again by Fred Hess, who posited, “Where Do We Go From Here?” Ben Adler of Politico; Arthur Rothkopf, former president of Lafayette College and now a trustee of American University; and Jane Tatibouet from the University of Hawaii’s Board of Regents indicated the strong commitment and affection trustees had for their institutions; how their time-consuming work is considered a labor of love, done uncompensated, while they carry the burden of oversight, audit, policy making—a full range of checks and balances. Ultimately, the question raised was, “Exactly for whom are the university trustees stewards, and for what?” Are they responsible to external and/or internal audiences? What structure, what sort of board—what ideal size and make-up—best serves the university’s goals and needs? And, looking at universities and their problems, we were left with the unanswered question, “Why, too often, do smart people do stupid things?”
I came away impressed by the commitment of all of the parties to the preservation and enhancement of the academy, to the perpetuation of the free exchange of ideas, to scholarship and excellence and transparency and accountability and positive reform. Not only the panelists but the audience who participated with Q&A (most often politely but at times perhaps forcefully or even testily, also affirmed their wish for improving the overall health of universities. And while from time to time one can quibble with ACTA’s love of a good headline, I concluded that their commitment to the future of higher education was unreconstructed. The conversation added value for many stakeholders, and if even half the group took the ideas back to the drawing board, perhaps we’ll see some new approaches to governance floated about during the months to come. It is, after all, an election year.
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