Making Boards Accountable for Themselves

Boards are at the apex of the institutions they serve, so the buck stops with them. They should not hide, as they should have nothing to hide, write Cathy Trower and Peter Eckel.

December 16, 2016
 
 

As we read the current news about higher education and of failures of leadership by both administrators and boards, we can’t help but ask ourselves, “What the hell is going on?” Consider Antioch College, Cooper Union, Sweet Briar College, Temple University, the University of Louisville, the University of Missouri, the University of Virginia -- it seems that no institutional type is exempt from governance woes and sometimes the intervention of attorneys general, governors, alumni and more.

At the heart of many of these situations is the challenge of board accountability. Most people involved in higher education are familiar with some form of accountability. Accreditation addresses institutional accountability. The student learning movement has increased the emphasis on faculty accountability. But while accrediting agencies do call attention to board accountability, particularly when boards go off the rails, board accountability has yet to garner the same attention.

Governance accountability is difficult for a variety of reasons. First, it often includes high-stakes decisions that not everyone will agree with. Second, board deliberations often take place behind closed doors or, even if open, without much of an audience. Third, many stakeholders don’t understand governance and its role. These factors add up to a degree of skepticism about the board -- even if it is doing its work well and honorably. Because of this, boards must work extra hard to ensure they are accountable and viewed as being so.

Indeed, boards should be out ahead of the accountability curve. Doing so would greatly help them and their institutions. So what is accountability when it comes to governance? To whom are boards accountable and for what? And how can they improve their accountability?

For What Is the Board Accountable?

There are five essential areas of board responsibility and accountability:

  1. Upholding the institution’s mission;
  2. Selecting, compensating, evaluating and firing the president;
  3. Overseeing the fiscal health and integrity of the institution;
  4. Overseeing the quality of programs, services and other institutional offerings; and
  5. Ensuring the board’s own performance and conduct.

Of this list above, the final one tends to be the one that boards most often are least prepared to carry out well.

To Whom Is the Board Accountable?

First and foremost, because they hold their institutions in the public trust, boards of both independent and public colleges and universities are accountable for achieving public purposes. Boards that end up in the headlines for misbehavior often do not violate legal statutes. Instead, they and their institutions lose public trust.

Thus, board accountability has a public dimension to it. Boards need to behave in ways that make sure that the public trusts them and they are doing their collective best to move the institution or state system forward. While boards are often called upon to make difficult and controversial decisions, it often is the court of public opinion in which boards are judged.

At its most basic level, this public accountability is akin to government agencies answering to the electorate and businesses answering to stockholders. However, boards do not have stockholders or electorates who can readily demand greater accountability. Higher education’s stakeholders are a varied group, including policy makers, alumni, students, staff and faculty, and for public universities, the citizens of the state. And the expectations of these different constituencies may differ greatly from each other.

How, Legally, Is the Board Accountable?

Because the institutions they govern are supported by public contributions and enjoy favorable tax treatment, higher education boards are legally bound by the duties of care (exercising diligent oversight, being prepared for meetings), loyalty (placing organizational interest over self-interest, ensuring no conflicts of interest) and obedience (staying true to the institution’s mission, ensuring funds raised are used in support of the mission).

All academic institutions have articles of incorporation (bylaws) that describe the board as responsible for what the institution does and how it does it. Boards are also answerable to federal, state and local agencies, and they must file a Form 990 with the IRS that provides an overview of institutional governance, activities and programs, as well as discloses detailed financial information. In addition, regional accreditation keeps an eye on governance.

How Can Boards Ensure Governance Accountability?

So far, this all seems fairly straightforward. So, why so many train wrecks? We don’t believe they occur because laws, bylaws and articles of incorporation aren’t clear -- they are. We don’t believe they occur because of stupidity -- by and large, trustees are really smart, experienced people. We don’t believe they occur because of evil intention -- trustees generally want to do good work and serve faithfully.

Perhaps they occur because it’s easy to have words on paper, but more difficult to enact them. Some boards lack internal practices that help keep them aware of their accountability and that bring issues to light to help them avoid blind spots, potholes and sinkholes.

Further, boards of public universities and state systems govern in public, which certainly ups the ante. State sunshine laws are intended to increase transparency and, correspondingly, accountability. But there’s a downside, too: having to govern in public sometimes encourages individual trustees to create workarounds or to curtail dialogue, robust discussion, provocative questions and meaty deliberations.

Still despite the challenges of governing in public -- in the sunshine -- we believe that all boards can serve their organizations better by ensuring accountability. Here’s how.

  • Hold a discussion about accountability. Boards should periodically have a straightforward conversation about to whom they are accountable and how they might demonstrate it. Public boards may more easily have this conversation, given their appointment processes and the strong sense of priorities that exists in many states, while boards of independent colleges and universities may have a more complicated situation. Boards at religiously affiliated institutions may feel accountable to the sponsoring order, particularly regarding mission. Other boards may identify other stakeholders such as students, alumni, donors or the larger community. The ways in which boards demonstrate accountability to each group may vary. But the more boards can be intentional about this, the better they will govern.
  • Practice predecision accountability. In its simplest terms, this strategy means that boards should make decisions as if they -- not the president -- had to explain them to stakeholders. For example, for each board meeting, randomly select two trustees who will, in mock trial fashion, need to explain a board dialogue or decision to an unknown entity (a stakeholder group) waiting outside the door. Research shows that practicing predecisional accountability increases trustee engagement in the meeting discussions and encourages trustees to consider more stakeholder viewpoints (because they don’t know who’s waiting to hear the upshot), ask more questions and take more notes. Ultimately, they govern better.
  • Epitomize performance accountability for the institution. If the board holds itself up as an exemplar of performance accountability, it is better positioned to hold others accountable as well as themselves. That means being explicit about the board’s collective understanding of great governance, how it intends to execute it and how it will measure it. Periodically (every two to three years, although some boards undertake an annual review) you should conduct a comprehensive self-assessment of the board’s collective performance. It’s also a good idea to have trustees self-assess their own engagement and performance. While these assessments might be a bit inflated, the simple act of self-reflection is helpful. It’s also good practice to assess the work of committees and board meetings. Specific ideas for all of these types of assessment may be found in Trower’s book The Practitioner’s Guide to Governance as Leadership.
  • Create and uphold a statement of expectations. Another good practice is to have a written statement of trustee expectations, or a code of conduct, that spells out the responsibilities of board members and how the board will deal with violations. You should make this statement public and demonstrate that the board takes seriously the ways its members engage with one another and with the work of governance. Such a statement can also help boards to moderate potentially disruptive behavior by a few rogue trustees. Great boards do not tolerate renegades who violate agreed-upon terms of engagement and have consequences for misbehavior.
  • Seek management’s overall assessment annually. The best boards engage in dialogue with the president about how the board is performing. Such conversations can happen with the board chair or with the executive or governance committee, and overarching views should be discussed with the full board. Some boards ask the senior staff members to also complete the written board assessment survey and analyze results comparing board to staff members, in the aggregate (so as to not compromise anonymity). Boards provide presidents with feedback and assessment, so why not reverse the process?
  • Hold executive sessions for reflective practice. To learn and improve, boards should reflect on their performance, which can often best be done in executive session without senior leadership present. Such sessions are a time for trustees to open up with one another about how they see the board’s performance and talk about blind spots that may have been revealed in the assessments and how to overcome them. Another best practice of the best boards is to periodically take stock of the past year and discuss both contributions/successes and shortfalls in terms of the board’s governance function. Questions to ask: What did we do especially well? Where did we fall short? Why? What have we learned? How will we govern still better in the year ahead?
  • Avoid conflicts of interest. This point should not need to be reinforced, yet trustees too often find themselves in conflict. Board accountability is undermined quickly and deeply when conflicts of interest exist. While not all conflicts are avoidable, many are and should be.
  • Use the mission as a guidepost and touchstone. Too many boards get into difficulty when their actions are viewed as running counter to the mission and values of the university. For example, boards lose credibility when they offer presidents excessive compensation packages, yet leave students with a high debt load or come under scrutiny for not paying staff living wages. Boards can appoint trustees at each meeting to ask, “How does this decision reflect on our values and mission?” Hopefully such a capacity will become naturally ingrained over time. This is a type of values sniff test -- if the decision smells bad, it probably is.

In summary, a board can take many steps to ensure accountability for itself. Because boards are at the apex of the institutions they serve, the buck stops with them. They cannot and should not hide, as they should have nothing to hide. You may have noted an undercurrent of the concept of integrity running through all this. Ultimately, that is what board accountability boils down to: integrity. Without it, nothing good can happen. Once violated, it is difficult to overcome. With it, good work is possible.

Bio

Cathy Trower is president of Trower & Trower Inc., a board governance consulting firm; a board member at BoardSource in Washington, D.C.; and a trustee at Wheaton College, Mass. Peter Eckel is a senior fellow and the director of leadership at the Alliance for Higher Education and Democracy in the University of Pennsylvania’s Graduate School of Education and a trustee at the University of La Verne.

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