The way that we’ve thought about governance is changing in nearly every realm and industry around the globe. Colleges and universities have largely let their senior managers run their institutions. Boards of trustees typically recruit dedicated and loyal alumni to the board with the goal of fundraising. The pressures of compliance and regulatory matters now require colleges and universities to recruit board trustees who have expertise in governance. Improving governance for colleges and universities means following the same good governance principles as listed corporations. It also means paying greater attention to what goes on in other corporate industries to protect higher educational institutions from risk.
For many colleges and universities, the role of board trustees is changing. Board trustees can improve governance by redirecting their focus to overseeing managers and strategic planning, and learning more about governance in general.
Something that’s unique about colleges and universities is that good governance means creating a mutually rewarding relationship with their communities. Colleges prepare and educate students to become members of the business community. In turn, communities support the colleges financially and in other ways.
Improving Governance in General
There is plenty of room among college and university boards to improve governance. Board trustees will need to truly understand what governance is, take responsibility for strategic direction and accept responsibility for risk. They will also need to monitor college performance, develop a strong working relationship with the CEO or college president, and work diligently toward board development.
College trustees need to strike a balance between compliance with regulatory matters and keeping a strong pulse on the college’s performance. Both sets of duties will lead to the long-term sustainability of the institution.
Board trustees need to have a better understanding of how the economy has forced change in their roles. Some colleges and universities have been slow to recognize that the responsibility for forming a strategic direction and sharing that with management lies with the board of trustees. Since this is a fairly new change for some colleges, it’s important to clarify the distinction between the board’s role and management’s role in light of their respective duties.
Reading and understanding reports may be a new task for some board members. Board development may be in order for some board trustees so that they can better understand the key performance drivers and how to define success. College committees may need to revise the format of reports to make them easily understandable for board trustees. Board trustees need to take responsibility for reviewing information that management presents to them. College trustees also have a responsibility to ask managers for any additional information they need to make decisions about strategic planning. They also need to gather information that answers additional questions they may have. Trustees may need to make site visits, attend presentations, obtain independent professional advice and seek individual director development programs to make sure they’re getting all the information they need to make sound decisions.
In some cases, college boards may need to take on greater responsibility in hiring a CEO or college president and monitoring their performance.
The board is ultimately responsible for all actions and decisions of the college. For this reason, trustees must establish a structure for overseeing risk and managing internal controls. Good governance for colleges means that board trustees should work toward developing a greater understanding of the trade-off between risk and rewards.
Improving governance for colleges includes appointing a qualified chairperson. As roles and relationships change in college governance, a skilled chairperson creates trust between the board and managers. Candidates for board chair need excellent leadership, communication and interpersonal skills.
Finally, college board trustees need to work on developing their board director skills and knowledge of governance. The board should strive for a board composition that is diverse and that accurately reflects the community it serves. Annual board self-evaluations will help trustees understand what skills they need to develop.
Include Input From Stakeholders
Colleges and universities serve the public, so it’s important that college trustees are open to hearing and understanding the public’s needs. Good governance for colleges and universities includes incorporating the orderly involvement of students, employees and citizens-at-large in discussions about new policies, plans and practices. Feedback from students and the community will help trustees to identify trends and emerging opportunities and prioritize their tasks.
Importance of the Academic Committee
Most institutions of higher learning form an academic committee that focuses on issues such as curriculum, course offerings, grading policies, degree requirements, faculty qualifications and accreditation requirements. College board trustees need to take the advice and recommendations of this committee and apply it to their overall strategic plan.
An Example From Nevada of Good Governance in Practice
The state of Nevada is undergoing vast economic change and development. As a result, the needs of the workforce in its communities are changing vastly along with it. Groups in Nevada have developed a sound economic development strategy to improve the economy in the state. One of the most glaring concepts that has emerged from the new economic plan is that the state’s current workforce is not very well educated in the STEM (Science, Technology, Engineering and Math) areas — subjects that play a vital role in economic growth.
The Brookings Institution’s Metropolitan Policy Program and Brookings Mountain West partnered with the University of Nevada at Las Vegas and concluded that colleges and universities within the state need to align the college course offerings with the new economic development strategy. Essentially, colleges in the state will need to change their primary focus to STEM subjects to ensure that they are producing graduates who will be well-qualified for the jobs that will be waiting for them in their communities and throughout the state after graduation.
Obviously, this drastic change calls for major changes in college governance in Nevada institutions of higher learning. By making these changes, the trustees will fulfill their governance obligations toward partnering with their communities.
Improving governance is something for which all boards should continually strive. Colleges and universities are in the unique position of offering education to students. The board’s investment in their time, faculty and students translates directly into a positive investment into their community and economy.