AGB Statement on Board Accountability

By January 7, 2007 March 7th, 2019 AGB Statements, Reports and Statements

Wednesday, January 17, 2007

The below is excerpted from the introduction; download the full statement.

Although the precise point at which a college or university governing board may justifiably
be called “accountable” is elusive, the issue of board accountability warrants attention. Certain
elements of board accountability—observing the highest standards of fiduciary duty, avoiding the
taint of conflict of interest in decision making, and scrupulously observing applicable federal, state,
and local laws—seem so obvious as to need little elaboration. Beyond such familiar requirements,
however, the terrain is less plainly marked, and greater clarity will help the higher education
community and the public better appreciate the full measure of board accountability.

The AGB Board of Directors believes that though the overall performance of the governing
boards of America’s colleges and universities remains commendable, documenting certain policies
and practices will foster confidence among presidents and chancellors, trustees and regents, and the
general public that these boards are performing responsibly, effectively, and accountably. The AGB
board believes such guidance to be in the public interest as well as that of higher education.

This view recently was underscored by the “Report of the AGB Task Force on the State of the
Presidency in American Higher Education,” which recommended that the association develop a
formal statement addressing board accountability and fiduciary responsibility. Development of such
a statement also comports with the heightened emphasis being placed on accountability and selfregulation
by the Panel on the Nonprofit Sector convened by Independent Sector.

Adoption by the AGB Board of Directors of this “Statement on Board Accountability”
reflects a prevailing set of conditions:

  • Growing pressure on many sectors of the nonprofit community for greater
    accountability presents a compelling opportunity to address this issue.
  • Changes in the legal and regulatory environment (exemplified by Sarbanes-Oxley
    legislation), though largely designed to address problems in the corporate sector, are not
    irrelevant to higher education.
  • Lapses and failures in the integrity and governance of certain participants in the
    nonprofit and higher education communities—particularly in such areas as conflict of
    interest, executive compensation, and financial oversight—have raised troubling questions.
  • Increased scrutiny from congressional committees and state officials, and a litigious
    environment that affects all colleges and universities, call for clear articulation of the
    principles of autonomy and authority of governing boards.

The goals and aims of the AGB board’s “Statement on Board Accountability” include
the following:

  • Reaffirm within the higher education community, and explain to a broader
    audience, core principles of board accountability and responsibility. (A summary of basic
    responsibilities of governing boards appears as an appendix.)
  • Impart a deeper appreciation of the gravity of concerns regarding governance, threats
    to board authority, and institutional autonomy.
  • Recognize a sense of urgency about responding to such concerns before rigid external
    regulation preempts responsive internal action.
  • Secure a wider and deeper commitment of boards to broadly shared principles and policies.
  • Place college and university governing boards at the forefront of the nonprofit sector’s
    response to concerns about governance and accountability.
  • Provide appropriate overarching policies so credible that their acceptance across higher
    education is an inevitable response.

Download the full statement.