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Contract negotiations put Morgan State, University of Iowa presidents in tenuous positions

Twisting in the Wind?
January 4, 2013

Sally Mason had a rough December as president of the University of Iowa. She faced public criticism from the chair of the state Board of Regents as well as the governor, and had to manage the university through controversies over sexual harassment by an athletics department academics adviser and a vote of no confidence in the new dean of the College of Education, who resigned shortly after.

And on top of all that came the news that she has been working without a contract since her original five-year deal ended July 31.

While plenty of public college and university presidents work without contracts – often simply serving at the pleasure of the institution’s governing board -- it is unusual for a president to shift from having a contract to not having one. Contract renewals for only one year, as recently happened to Morgan State University President David J. Wilson, are also uncommon, except in the case of stated retirements or interim presidents.

While both Mason and Wilson say they are content with their arrangements, such circumstances put presidents in a tenuous position, not only because they lose some of their contractual protections but also because the change is perceived (rightly or not)  to be a sign that the board does not have full confidence in its president. It also introduces instability in the institution’s leadership, which can undermine long-term efforts. Underscoring the lack of stability is the Morgan State situation, where the board originally intended to seek to seek new leadership, but reversed course and struck a one-year deal.

“Not only does it change the relationship with the board, it shifts the relationship with all other stakeholders,” said Jessica S. Kozloff, president and senior consultant at Academic Search, Inc., a firm that helps boards hire presidents.

Higher education researchers and observers also said the situations at Morgan State and the University of Iowa are an outgrowth of often-contradictory pressures on boards to recruit and retain strong leadership while also managing increased public pressure to hold institutional leaders accountable.

“There is a scarcity of highly qualified people for these positions, and you don’t want to kick someone out who’s doing a reasonable job until you know what you might get if you replace them,” said James H. Finkelstein, a professor of public policy at George Mason University who has studied the composition of presidential contracts.

Finkelstein said that the pressures on boards to be flexible combined with the rapid turnover of board members that often accompanies periods of political change makes him think situations like those at Morgan State and the University of Iowa will become more common. “As presidential contracts come to an end, boards may decide to put them as ‘at-will’ employees from here on out,” he said.

Difficult Documents

One reason why these situations arise is that sophisticated university presidential contracts are a relatively new development in public higher education.

While corporate CEOs would never work without a contract, and public sector cabinet secretaries would never expect one, the job of public university president falls somewhere between those two. As a result, it’s not unusual to find some who have contracts and some who don’t.

In some states and universities, the norm is for there to be no contract and for the president to simply serve at the will of the board. North Carolina prohibits its public university presidents and chancellors from having contracts and instead issues letters outlining the terms of employment, salary, etc. In other states contracts are the norm.

Raymond Cotton, a Washington lawyer who represents both boards and presidents in contract negotiations and is currently representing Mason, said contracts are quickly becoming the norm in public higher education because they provide security for candidates and stability for institutions – an attractive proposition for a field in which openings outnumber proven candidates.

Finkelstein, who compiled a database of more than 100 public university president contracts, said the documents have become more prevalent and more sophisticated, ranging anywhere from a one-page memorandum to 20- or 30-page employment agreements detailing perks such as deferred compensation, housing, and bonuses. He chalked some of the change up to the increasingly complexity of presidential jobs and the types of people who are being drawn to them, including many individuals with experience outside higher education.

"All the time people say these presidents are running companies/corporations, and therefore need to be compensated as if they were CEO and given degrees of flexibility they would expect there," he said.

Public Disagreements

Kozloff and Cotton said it is not uncommon for presidents and boards to discuss the terms of employment and objectives in closed board meetings, even at public institutions where board meetings are generally open. “We often hear of private conversations with presidents in which boards say things have got to change,” Kozloff said. “You understand that your contract is up in two years and that things have got to happen in order to be renewed.”

But when that conversation spills out into the public space, as seems to be the case at the University of Iowa and Morgan State, they can raise questions about the relationship between the board and the president.

In the case of Morgan State, the board voted in early December not to extend Wilson’s initial three-year contract beyond its expiration in June. Wilson had only been president of the university for 2.5 years. Because the contract was up at the end of three years, the board was not required to provide justification for its decision, though the fact that the board's vote was close, 8-7, became public knowledge.

Cotton, who has written more than 300 presidential contracts since entering the field in 1981, said the most common deals are initial three-year contracts with a five-year renewal. Such agreements give boards and presidents a "trial period" to see if they can work together and then, if things seem to be working, an opportunity to lock in more stability.

Wilson, who seems to enjoy broad support from the Morgan State students and faculty members, said he was “blindsided” by the decision. The board declined to elaborate on that initial decision, but in a letter to the campus community, Wilson hinted that their decision was connected to the fact that Wilson was a finalist in the presidential search at the State University of New York at Albany.

"It is very unfortunate that, based on what I have heard, I am being punished for having a top research university in this nation take note of our achievements at Morgan and express appreciation for the body of work that we have achieved," Wilson wrote.

While the board did not immediately lay out any plans to replace Wilson, the general impression among faculty members and students, and stated in Wilson’s letter to the community, was that he would leave at the end of the contract.

The board reversed course on Friday, striking a one-year extension with Wilson, again without elaborating on its decision.

Cotton said the lack of elaboration as to why the board made either decision was a problem, particularly at a public university, where faculty, students and community members often feel entitled to some explanation.

Unlike the Morgan State case, Mason’s job at the University of Iowa did not seem imperiled by the board’s decision not to renew her contract, a decision that was made this summer but did not become public until December. Mason, who has been at Iowa since 2007, became an “at-will” employee of the board starting August 1 when her contract expired.

The board has not indicated any interest in searching for a new president, and gave Mason a 2 percent raise when the contract expired as well as a deferred compensation package that runs through 2016, which is when Mason seems inclined to step down. Mason herself has said in multiple interviews that she is not concerned about her job security.

When the Iowa board declined to renew Mason's contract, the board said it asked Mason to “reframe and reprioritize” her goals for the current year, indicating that she and the board might not have been on the same page on some issues.

Finkelstein said the actions taken by the Iowa and Morgan State boards make sense in the context of the market. He and others pointed to larger trends in higher education, including the rapid turnover of board members, a desire to hold officials accountable, and a fear of messy termination controversies like the one at the University of Virginia, that all contribute to an uneasiness about long-term employment deals contracts.

Public Perception

Iowa governor Terry Branstad said in the wake of the dustup at the University of Iowa that Mason’s situation was not an issue, and cited his own experience as president of Des Moines University, where he worked without a contract for the second three years of his six-year term.

“I don’t think it’s a big deal,” Branstad said. “I was the president of Des Moines University and as I said I initially had a three-year contract and never asked for a contract beyond that because I knew that I reported to the board of trustees and as long as I did my job well I had confidence that I didn’t need to worry about it.”

Others point to the fact that all public university presidents technically serve at the pleasure of their boards, and even having a contract doesn’t guarantee employment, pointing to cases like the University of Virginia and the University of Illinois system. The contracts Cotton writes always allow the board to get out of the agreement without cause (though that often comes at a price).

But whether Mason, Wilson, and their boards perceive the relationship to be strained is almost a moot point, because their faculty members and other institutional stakeholders clearly do, which people like Cotton and Kozloff said is a larger issue.

Jeannette Rufus, a Morgan State alumna and the head of the campus employees' union, told The Baltimore Sun that the one-year contract was a "death sentence" and a "smoke screen" designed to deflect criticism from faculty, staff and students.

In early December, faculty and student leaders at Iowa expressed confidence in Mason, a move that is typically reserved for times when faculty feel the president’s job is threatened. The statements of support resembled those made last May at the University of Texas at Austin, when reports hinted that the system’s board was considering firing William Powers, the president of the Austin campus.

Cotton said a change like the one seen at Iowa, where the president is suddenly without a contract, introduces uncertainty into a system, which can make it more difficult for the president to carry out larger objectives.

“It hobbles the president because … the board has now sent out a public announcement that they’ve gone from stability to instability,” Cotton said. “Now you tell me, is she going to be competitive bringing in the top vice presidents, professors who come and bring research dollars, heads of centers. All of those kinds of people want to know who the president is going to be, because they have to deal with that president.”

“Presidents are pretty used to living in an uncertain world, though with more certainty the easier it is to have strong leadership,” Kozloff said.

Cotton said the lack of willingness to strike a deal could endanger the university’s prospects of finding a successor, since strong candidates aren’t likely to walk into a position where there is no certainty of employment or support from the board.

Cotton said the decision by the Morgan State board to strike a one-year contract is a better solution than what is taking place at the University of Iowa. “What the board has done is given themselves 18 months to try to work out their differences,” he said. “If they find that this is someone the board can work with, they can enter into a longer deal, but if not, then you give yourself plenty of time to do a search and you treat him like a professional on his way out.”

 

 

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