Why this is important.
Many colleges and universities are at a crossroads. Governing boards across the country are leading their institutions through major structural changes to their business models, whether that be a merger, affiliation, or strategic partnership. AGB empowers our members to implement graceful transitions that reflect sound fiduciary responsibility, honor the legacy of the institution, and protect students, faculty, and staff as much as possible.
Questions for boards.
These are key questions for your board to consider:
Board Processes
Consequential Questions:
- If our board is considering a merger, have we discussed these questions?
- How substantial is the other institution’s endowment fund?
- What were the most recent enrollment results of the other institution? How did those compare with the targeted numbers?
- How much unsecured debt does the other institution have outstanding?
- Does our board’s structure—board member makeup, committees, governance documents, leadership, and collaboration with its host institution—enable a truly forward-looking agenda for the board in support of the institution?
- Do recent fiscal results and future financial and demographic trends point to a need to rethink or reform our institution’s current business model? Could mergers or affiliations lead to greater financial stability and long-term sustainability?
Sources:
Higher Education Business Models Under Stress: Achieving Graceful Transitions in the Academy by Melody Rose and Larry D. Large, AGB 2021
Top Strategic Issues for Boards 2020–2021, AGB 2020
Board Engagement
Consequential Questions:
- Who are our internal stakeholder groups? What do they need to know and when, and who should contact them as our institution goes through this transition?
- Who are our external stakeholder groups? What do they need to know and when, and who should contact them as our institution goes through this transition?
Sources:
Higher Education Business Models Under Stress: Achieving Graceful Transitions in the Academy by Melody Rose and Larry D. Large, AGB 2021
Top Strategic Issues for Boards 2020–2021, AGB 2020
Risk Management
Consequential Questions:
- What are the most pressing strategic issues our board must resolve for the long-term health of our institution? Is our board putting these items on the agenda for meetings and making critical decisions?
- Which employees are essential at each phase of closure? Which, though not essential, would be highly beneficial to retain?
Sources:
Higher Education Business Models Under Stress: Achieving Graceful Transitions in the Academy by Melody Rose and Larry D. Large, AGB 2021
Top Strategic Issues for Boards 2020–2021, AGB 2020
Recommended resources.
We carefully curated these staff-picked resources for you:
Higher Education Business Models Under Stress
Achieving Graceful Transitions in the Academy
2021
Melody Rose and Larry D. Large
“Mergers and Affiliations”
Consulting Service
AGB
“Colleges at a Crossroads: Closures, Affiliations, and Mergers”
Trusteeship, May/June 2020
David Tobenkin
Higher Education Business Models Under Stress
Podcast
Featuring Melody Rose, Larry D. Large, and Chris Moloney
“The Consolidation Era in Higher Education: Affiliations vs. Mergers”
Trusteeship, July/August 2021
Rick Beyer
Transformation for Small and Mid-Sized Colleges: The Roles of Mergers, Affiliations, and Partnerships
Webinar On Demand
Presented by Rick Beyer
