Oct. 5, 2007

Board Rights vs. Alumni Rights

When it comes to controlling the institutions they love, alumni have been flexing their muscles of late.

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Staking broad claims to “alumni rights,” some supporters of an increased role for interested graduates in the management of their alma maters have launched campaigns to gain seats on boards or secure greater authority for alumni organizations, with varying success.

The insurgency at Dartmouth College continues, most recently in a lawsuit contesting the administration’s decision to add eight board-selected trustees to its governing body. A judge ordered the Mississippi University for Women last Friday to make nice with the alumni group it had shunned after disputes over its level of autonomy. In a much-watched case, meanwhile, a Princeton University alumnus awaits the outcome of a lawsuit claiming the institution misused his parents’ 1961 donation of $35 million to the Woodrow Wilson School of Public and International Affairs. And Antioch College alumni are both fighting with Antioch University’s board and working to come up with a plan to prevent the college from being suspended.

Lawsuits over the direction of a college aren’t new. Such disputes have a rich history, and not all of them end as harmoniously as that at Trinity University in Washington, D.C., when some alumni over a decade ago staged a revolt over new academic programs, changing student demographics and an evolving curricular focus. (Today, the majority-alumni board is stronger than ever, according to the university’s president.) At Randolph-Macon Woman’s College — now Randolph College — alumni and students claimed a breach of contract after its decision to admit men.

The disputes often remain within the confines of an institution’s own governance structure, with battles playing out in board meetings and outreach to disgruntled alumni. But sometimes, the legal system gets involved, and there the issues can sometimes get murky. Part of the reason, some observers of governance disputes suggest, is that there are too many potentially relevant protocols to follow: laws that differ by state, federal law, university bylaws. Partially as a result, legal outcomes can’t necessarily be generalized, especially when individual cases — while often sharing broad concerns such as the role of alumni and the duties of trustees — vary so widely.

In the Dartmouth case, questions have already been raised about the suit’s legal standing — that is, whether the plaintiff, the Association of Alumni, can prove that it has been legitimately affected under the relevant law. But even that might not become the deciding factor in any outcome. “I don’t think they’ll be struck on the basis of standing, but challenges of that kind historically have met with limited success,” said Sheldon E. Steinbach, a lawyer in the postsecondary education practice of the Washington law firm Dow Lohnes.

At issue, fundamentally, is the way colleges are governed. Bylaws are typically legally binding documents that determine how boards operate, change their own rules and pick new members. If boards run afoul of their own rules, the law could potentially step in — but the question remains as to which board actions can be considered binding. At Dartmouth, part of the dispute is over whether an 1891 resolution is an “agreement” about the structure of the board or a permanent, legally binding document.

“The college has been advised by its attorneys that the board has full authority to enlarge the board as it did and to make the other governance changes it authorized, and that there is no merit to the legal claims asserted by the executive committee members who voted to bring the suit,” said Dartmouth President James Wright in a statement. “The college is well-prepared to respond to this legal action.”

A number of legal scenarios could potentially play out, hinging on questions of standing, breach of contract and whether the resolution is binding.

“The rule of thumb, of course, is that anybody can sue anybody, then it’s up to the courts to decide if it’s legitimate. I think that the real question in all of these cases is whether the Board of Trustees followed appropriate legal procedure in making whatever decisions they made to reform their governance structure or eliminate members or so forth,” said Patricia A. McGuire, the president of Trinity and a former assistant dean and adjunct professor at Georgetown University Law Center.

At Trinity, McGuire presided over the kind of conflict that makes headlines in Hanover today. While there were some three to four years of difficulty, she said, the institution came out in the end with stronger governance.

“[W]hat happened was, both the alumni who were on the alumni association board, which is an independent association at Trinity, and those who were on our Board of Trustees, began to address these issues with those who didn’t like what was happening,” McGuire explained. “And we really relied on alums to talk to other alums, to help explain the story and help bring them along. And that was very important for us....”

The dispute centered, among other issues, on the changing demographics of the college, which was beginning to admit more lower-income and minority students from the surrounding area — a contrast from the Northeastern Catholic background of its more traditional alumni.

“The Board of Trustees told me that my job was to run the affairs of the college and not get sucked into the dispute. And that was the best advice I ever got,” McGuire said.

Unlike the unusual arrangement at Dartmouth, which until recently allowed half of its board to be elected by alumni, Trinity’s board selects and approves all of its members. But this common practice of a “self-perpetuating board” doesn’t preclude alumni involvement, McGuire suggested. On the contrary, over half of its members are now alumni.

The Role of Trustees

Part of the problem with the recent flareups, McGuire said, is a misunderstanding about the role of trustees in running a college. Universities are private-sector corporations with corporate boards and corporate rules; those on governing boards are entrusted with the stewardship of its finances and strategy, not necessarily its academic direction. That means:

• Trustees have a legal obligation to an “undivided duty of loyalty,” meaning that they don’t represent only a subset of alumni or a certain constituency or interest group; they must act in the interests of the institution as a whole. “The rule of thumb for a board is they need to take a strategic look at an institution and be balanced and sensitive to the needs of all constituents, but not having to address special interests within the boardroom,” said Richard D. Legon, the president of the Association of Governing Boards of Universities and Colleges.
• Trustees shouldn’t involve themselves in curricular or academic issues, McGuire said: they should focus on fiduciary responsibilities, management and accreditation standards rather than “whether you teach Western Civilization or not.” She continued: “[T]hose decisions are in the realm of the faculty,” and if the board enters that realm, “that violates academic freedom, among many other things.”

The Role of Alumni

So where does that leave alumni with a vested interest in affecting the goals and outcomes of their beloved institutions? For John Lippincott, the president of the Council for Advancement and Support of Education, the answer lies in how universities approach their alumni during periods of change.

“... [A]lumni do take a very strong interest in their alma maters and do feel legally or otherwise, that they have a stake in the future of the institution. If the institution is going through changes and the alumni body feels that they have been left out of the process, then I think it is going to set up a dynamic in which you can get groups of alumni who are going to oppose those changes,” Lippincott said.

That can sometimes create a situation in which a relative minority of alumni splinter to form their own bloc of sorts, as was the case at Dartmouth.

“It is unfortunate when an institution finds itself in a position where alumni loyalties are somehow being split between their loyalty for the institution and their loyalty for the alumni association or the alumni body. Nobody benefits from that situation in the end,” he said.

— Andy Guess

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