In an environment of heightened public scrutiny and accountability, governing boards should monitor their agendas and discussions to ensure they are devoting sufficient focus to each of their many duties. To do anything less is to risk being blindsided by a controversy, with stakeholders asking, “Where was the board?”
Among trustees’ many responsibilities, they provide oversight of finances and operations and they establish and enforce standards of performance for the chief executive. They are responsible for crafting policies and advancing the institution’s mission, goals, and values.
Complicating matters even further, governing boards must address near-term issues that require immediate action while also keeping an eye on the longer-term vision and strategy that will sustain the institution for future generations.
In 2018, AGB Press issued a special report, An Anatomy of Good Board Governance in Higher Education, which presents recommendations from a panel of experts regarding best practices in institutional governance. The report makes a persuasive case that good governance is the result of having the right composition of members who are able to focus on the right issues while engaging with each other and key constituencies in the right way to add value to the institution. The report concludes with some practical diagnostics to help boards improve their composition, focus, and engagement.
While few of us would argue with these three pillars of excellence, they can be elusive or simply pushed aside as meeting agendas pile high with items clamoring for attention. In the press of time, the urgent often crowds out the important. Even a well-intentioned board can devote too much attention to the comfortable routines of short-term performance metrics, such as tracking enrollment rates, while becoming lax on the institution’s long-term direction and strategy. Conversely, some boards focus a lot of their time and attention on broad policymaking that addresses important issues such as academic freedom without sufficient attention to the institution’s operations and its immediate accountability to stakeholders.
The simple truth is that some agenda items are more enjoyable than others. For example, most of us would prefer to spend time previewing beautiful architectural sketches of a new dormitory or sports arena than perusing the annual audit, especially if it is accompanied by a critical letter from the auditor. Over time, governing boards can gradually “drift” toward one focus or one mode of engagement until it becomes a kind of “habit” or part of the ingrained culture of the institution, implicitly embraced without pause for reflection and reassessment.
A simple, yet powerful dashboard can help governing boards track their focus, in particular, but also their engagement and composition, to ensure they fully embrace their many roles and duties. This tool can be used to set the agenda for regular meetings of the board and, on a broader level, to assess the overall workings of the board with respect to its routines and habits.
The work of any governing board can be construed along two dimensions:
- Strategic versus Tactical Focus: Some governance tasks, such as reviewing the long-range campus development plan, have a multi-year horizon requiring the board to focus on proactive and strategic issues such as land acquisition and financing. Other issues, such as an alleged impropriety by a high-profile employee, require tactical and laser-like focus on the institution’s standards of conduct and enforcement procedures, perhaps even a short-term crisis management plan.
- Policymaking versus Oversight Focus: Some governance challenges, such as protecting academic freedom and diversity, require careful deliberation on the institution’s policies and may involve careful calculations of both near-term and long-term consequences. On the other hand, the governing board must routinely exercise careful oversight of managerial issues such as reviewing and approving the annual operating budget, overseeing the audit, or assessing the performance of the chief executive.
Portraying these two dimensions as a dashboard with four cells allows us to plot a governing board’s various functions and duties as illustrated here.
A few examples illustrate the logic. Approving the institution’s tuition rate is in the upper-left quadrant because it is likely to be an annual chore that is intrinsically linked to the institution’s operating bud-get, student recruitment, and financial aid, which are essential operational issues that require board oversight. On the other hand, the search for a new chief executive also has managerial and operational consequences, but leadership succession has long-term strategic consequences far beyond next year’s horizon. Thus, that task is placed in the upper-right quadrant.
Establishing the institution’s policies regarding portfolio management and investments in, say, socially responsible mutual funds clearly has immediate consequences for short-term returns on investments and other earned income flows. Thus, establishing investment policies is placed in the lower-left quadrant. On the other hand, periodically reviewing and endorsing the institution’s mission statement also is a policy issue, but the long-term strategic implications are obvious. Therefore, that task is placed in the lower-right quadrant.
Clearly, the four cells are not mutually exclusive. Each of the two dimensions should be interpreted as a continuum that does not have clear break points. In other words, the distinction between a short-term tactical issue and a longer-term strategic issue is not always clear, and some board obligations, such as approving major program initiatives, have both tactical and strategic implications. Thus, the four-cell dashboard should be viewed as a conceptual tool that boards can discuss and adapt to their own needs, not a rigid classification scheme.
The central point of the dashboard is that trustees must focus on all four cells, sometimes simultaneously. Governing boards should regularly monitor themselves to ensure they are spending the appropriate amount of time and effort on each of the four cells. Thus, the governance dashboard can be used periodically to ensure the governing board and the top management team are sufficiently focused on each of the four cells. This does not mean that boards should always spread their attention equally among the four cells. For example, during an institutional crisis, the board may deliberately spend more time on the left side of the dashboard to focus its attention on tactical responses. The point is that each cell of the dashboard contains important governance functions on which the board should focus, to a greater or lesser extent, depending on circumstances. Drifting into or becoming “stuck” in one cell or the other will create imbalance and dysfunction.
For example, devoting too much attention to duties in the upper-left quadrant may lead to micromanagement. The lower-right quadrant could lead to disengagement and lack of fiduciary oversight and accountability, as illustrated in the second figure. Achieving “balance” does not necessarily require the board to spend an equal amount of time in each cell at all times. The board’s focus will surely shift from time to time, but in the long run, all four cells of the dashboard demand the board’s attention.
In addition to serving as a tool for the board’s focus, the framework has several ancillary applications:
- New board member recruitment and orientation: The four-cell dashboard is an intuitively appealing and logical way to recruit prospective board members or orient a new board to the current and future issues it faces. It also gives new members a glimpse of where they might add particular value to the board’s deliberations while alerting them that they must be fluent in all four.
- Agenda setting and meeting management: The dashboard can help board and committee chairs work effectively with presidents, chancellors, and other professional staff members to identify important issues and design meeting agendas and processes to ensure those issues receive proper focus and board engagement.
- Board assessment: The dashboard can be used to periodically assess whether the board is, in general, spending too much time and energy in one or a few cells. Of special concern is whether the board has gradually, and perhaps unintentionally, drifted into repeated focus on one cell to the exclusion of others. This could suggest that the board has gradually established a culture of micromanagement, aloofness, protectiveness, or hands-off behavior—and lost its focus.
- Board responsibilities: The board chair and the chief executive can use the dashboard as an educational tool to periodically remind even veteran trustees of their fiduciary responsibilities. Leadership development: The dashboard can serve as a guide to develop leader-ship skills and competencies of both board members and staff. The leadership demands in each cell are somewhat different, yet complementary.
- CEO accountabilities: Relatedly, the dashboard can provide a guide to annual assessment of any of the institutional leaders who report directly to the board. Does the chief executive have the requisite skills to guide and advise the board in each of the four cells? More important, is the CEO providing the board with the information it needs to effectively exercise its governance role in each cell?
The fiduciary duties of care, obedience, and loyalty provide a legal and ethical framework for trusteeship that can be traced back centuries to English common law. Thus, serving on an institutional governing board is a responsibility that historically has been entrusted to a select few who have the motivation, values, skills, and wisdom to be stewards of our nation’s most treasured institutions.
Institutional governance is a complex and nuanced concept that cannot be reduced to a generic four-cell dashboard. Yet, any institution can adapt the framework to its unique context and use it, along with other monitoring and self-assessment tools, to help the board remain attentive to its composition, focus, and engagement.
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