Why Get Governance Right

We must get governance right. There is no more fundamental task in any organization, especially in colleges and universities. It may take courage at times, but more often than not, it just takes commitment.

Last week, at the Investment Management and Governance Seminar sponsored by Commonfund and AGB, I had the opportunity to speak to trustees and senior financial professionals from across the non- profit sector about governance issues we all face. What is unique about non-profit governance particularly in the higher education sector in the United States is our autonomy and self-regulation. What comes with this autonomy - and in order to remain self-regulating - is responsibility for accountability. Boards are accountable to and for the transcendent values that guide and shape American higher education. Boards are accountable to the public interest and the public trust. Boards are accountable to the legitimate and relevant interest that various constituencies represent.

AGB recently outlined 12 principles boards should consider regarding board conflict of interest. We all have been made abundantly aware of what financial conflicts can do to an institution; other conflicts can be just as damaging.  Our suggested principles go much further than we have suggested before but we think it is time. So, if your board is looking for a New Year's Resolution, reviewing and strengthening conflict of interest policies might be a good one.