Examining Vendor-College Ties

July 31, 2007

The National Association of College and University Business Officers plans to review its existing policies on the interaction between exhibitors and attendees at its annual meetings and to propose a set of "best practices" -- and practices to be avoided -- in the relationships between corporate vendors and colleges generally, the association's top official said Monday.

John Walda, NACUBO's president, said in an interview Monday that the association's board had decided last week that the association should conduct a review of "best practices in university-vendor relationships," given the fact that the group's members -- chief financial officers and other campus business leaders -- are centrally involved in most major campus contracting and other major buying decisions.

And Walda also said that the association would, before its next annual meeting in 2008, "reexamine" its rules governing how corporate sponsors and exhibitors interact with the business officers and other campus officials who attend the conference.

"There do need to be standards of conduct so that the manner in which exhibitors and sponsors interact with participants is at an appropriate level," Walda said.

Walda's comments came as the association's 2007 meeting, which ends today, unfolded under the watchful eye of a lawyer from the staff of New York Attorney General Andrew M. Cuomo, whose investigation into the relationships between student loan companies and colleges led the National Association of Student Financial Aid Administrators to radically alter its policies governing corporate relationships at its own meeting last month. Gone from the NASFAA meeting were the raffles of iPods and other high-cost goods that had been commonplace in years past, with corporate exhibitors instead giving away pens and hackysacks. Gone were the sponsorships of sessions and events. And gone, too, were the tour buses that took groups of financial aid officers -- current or potential customers -- out to dinners or parties at pricey restaurants.

This week's meeting of the business officers’ group appeared to have been entirely unaffected by the student loan inquiry and its aftermath. The bookstore and housing companies, food service providers, and software vendors who pitched their wares in the mammoth exhibit hall at the New Orleans convention center raffled off DVD players, iPods, Wii’s and various pieces of electronic equipment. Some vendors paid tens of thousands of dollars for the right to sponsor meals, sessions or other events at the meeting and have their names prominently displayed. ( Inside Higher Ed exhibited at the NACUBO conference and paid $1,000 for the lowest sponsorship level.)

And each night, several of the companies -- Barnes and Noble, Sungard, American Campus Communities, among others -- took groups of college officials (and often their spouses) out to dinner at some of New Orleans’s finest restaurants and clubs.

In an interview published in Inside Higher Ed Monday, Cuomo and his aides warned that his office might well direct the same scrutiny they have imposed on the student loan industry to other corporate relationships in higher education. “If we find another manifestation of the illness,” Cuomo said, “then we will prosecute that, too ... be it credit cards, or health care services, or food services.” And as if to make good on his promise, the attorney general sent a member of his staff to this week's NACUBO meeting to watch the proceedings.

Walda, the NACUBO president, rejected the idea that there was an inherent problem in relationships between companies and colleges, or that it was inappropriate for the association to allow -- and even encourage -- vendors to sponsor events and otherwise market themselves directly to college business officers at the meeting.

“The questions we have to ask ourselves are what are the value to our members of having sponsors who are here and essentially presenting their products and services, and are we transparent about what we’re doing?” he said. Walda said he believed that it was good for the association, and for its member colleges and business officers, to work closely together to share expertise and ideas.

He cited a new “benchmarking tool” that two companies, Cognos and the Exeter Group, had helped NACUBO develop to help colleges better compare their financial and other performance to peer institutions. “That’s the sort of value our corporate partners bring to the table, and we need to make sure that whatever we do doesn’t diminish our ability to develop new expertise and new practices.”

But Walda acknowledged that the association was asking itself another question: “Are there boundaries we need to set up about how we interact” with vendors and companies?"

The association is approaching that question from two angles. Walda said that “over the next year,” NACUBO would examine its rules governing the role of companies at its annual meeting. The existing rules are designed to ensure that the association does not in any way endorse one product or company over another, and that the content of presentations at the annual meeting are determined solely by the quality of the content.

He said it was unlikely that the forthcoming review would alter the ability of companies to take groups of college officials out to private, off-site events after the formal conference day was over. “What these companies do after hours is between them and their clients,” and whether colleges and universities want their officials to be participating in such events is up to them, he said. “I don’t think associations should be in the business of dictating” policies like that.

Raffles of expensive products may not survive, though, Walda suggested. “I’m not sure I’m a fan of those, and we’ll probably be taking a look” at whether they should continue to be allowed.

Walda also said that the association’s board had agreed at a meeting last week that the group should undertake a review of relationships between vendors and institutions, with the idea of giving campus officials a sense of the “best practices” their peers use in governing such interactions. “We’re the logical association to be identifying” such practices, he said.

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