Addressing Crises

By AGB    //    Volume 27,  Number 2   //    March/April 2019
Trusteeship Issue: Institutions in Crisis - March/April 2019

In the wake of the recent admissions scandal and other crises that have engulfed higher education, AGB convened a webinar on March 27 entitled Institutions in Crisis: Risk and Responsibility for Higher Education Governance. The participants included Terrence MacTaggart, PhD, a former chancellor of both the Minnesota State University System and the University of Maine System, and a senior fellow of AGB; and Janice M. Abraham, the president of United Educators and a board member of both the American University and Whitman College. Trusteeship distills their discussion, which makes clear the need for a heightened level of board scrutiny now.

TRUSTEESHIP: On March 12 the FBI announced that 50 Individuals were charged with participating in a nationwide conspiracy that facilitated fraudulent admissions at several elite colleges and universities. The governing boards and chief executive officers of these institutions are now being asked to answer to students, faculty, state and federal lawmakers, and the public. While admissions policy violations across higher ed aren’t all that unique, this particular event has received above the fold attention. It included a bit of Hollywood, some of the most respected institutions in the nation, college sports, and substantial sums of money changing hands. More importantly, it added fuel to the public’s heightened skepticism about the higher education sector: Can the sector be trusted, and is a higher education degree even worth it? Many institutions and their boards asked themselves these questions: What does the scandal mean for their institution’s reputation? How badly did the ethical violations further tarnish the overall sector? Terry, what does the scandal mean for higher education in light of all of the other head
winds and disruptions facing higher education?

MacTAGGART: I think it depends, in part, on how the institutions in question and higher ed respond to it. One might try to dismiss it and say well, it was just the elites, and it’s even got a bit of a comic quality to it. I think it damages the sector as a whole, and it also raises this question: Would a different approach to governance—one focused more on integrity than prestige—have made a difference? I’d say it’s serious business, and it just adds to the woes that are confronted by presidents, trustees, and others engaged in higher ed.

TRUSTEESHIP: Did governance in any of these institutions, or maybe all of them, fail in some measure, and is that a pattern we’re seeing in some of the other high-profile scandals and failures that we’ve confronted?

MacTAGGART: I’m afraid it does. I think good governance is not going to guarantee crisis avoidance from scandals or other emergencies, but it sure positions you to handle it with greater integrity and greater responsibility. You think we would have learned from Penn State, from Michigan State, and the list goes on, that a board can’t be too alert or curious, in a very positive sense, about what’s happening on their campus or within their system. I’d like to underscore the idea of boards pursuing a culture of integrity. We’ve seen in other instances where cover-ups—either deliberate or quasi-deliberate efforts to ignore victims and ignore scandal—have just made a crisis worse and the impact on the reputation worse as well. I think boards need to be much more proactive and energetic in instilling a sense of integrity throughout their institution, beginning with their chief executives and going on down the line.

TRUSTEESHIP: Janice, your job working with United Educators’ members focuses on planning for, accepting, and mitigating risk. On a heat map of higher education risk, where do admissions policies tend to reside?

ABRAHAM: Higher education can’t separate itself from society; rather it is very much a part of society. There are three factors driving these scandals and elevating these challenges on institutional heat maps. The first is clearly the power and privilege discussion that’s happening in Congress and in the early stage of the next presidential race. It is happening on every one of our campuses: power and privilege, who has what and how social justice is manifesting itself. That’s a very big issue for all of us.

The second is the intensity of these scandals. I can’t remember a time when the competitive environment, outside of athletics, has ever been as intense. Inten-sity for raising money, for attracting the right students—“right” students I’m saying in quotation marks—running the largest comprehensive campaign, attracting the best faculty, or, for some, just staying in business. The environment—the business climate that we’re living in—is fragile and intensely competitive.

The third factor is there is some really great journalism going on. The Los Angeles Times, the New York Times, the Washington Post, the Wall Street Journal are covering our campuses, because of the first two issues that I mentioned, in a way that I’ve never seen before. Great reporters doing great reporting.

This is all creating a different kind of heat map and a level of intensity that I don’t think most trustees anticipate when they agree to join a governing board. Institution presidents have been aware of this, but I think most trustees are a little taken aback. There’s a realization of “oh my goodness.” This is not your father’s or grandfather’s board of trustees.

TRUSTEESHIP: We realize that higher education has been under siege over the last several years. That’s one of the reasons why AGB launched the Guardians Initiative—to look to board members to help balance the scales of public questions about whether or not higher ed is worth it. There are a lot of skeptics who have really made our job of demonstrating the return on investment far more challenging. And then, for some, higher education has that added lens of scandal and governance failure. They are rightly concerned about reports of sexual assault, research fraud, financial conflicts of interest, corrupt athletics programs and personnel, and Greek life issues on our campuses. Janice, are boards and administrators having the right conversations on the right issues and in the right way?

ABRAHAM: Some are, most aren’t. I think there are three things that boards and the senior leadership of universities and col-leges need to be doing. First, they need to be better informed of what’s happening on campus, what policies and procedures are in place, have they been reviewed, and how do things actually work on their campus? The second is that institutional leader-ship needs to be more intentional about these issues—talk about them and not hide behind them. It’s time for board members not just to fly into a campus and then leave again, but to spend time with the students, the community, and be leaders on these issues. As Terry mentioned earlier, they need to speak to the integrity and values that they have. The third is they need to understand the cultural issues, what train-ing is being offered, are people willing to come forward. With respect to the recent incidents, people on campus knew what was going on but didn’t come forward for a whole host of reasons. So it’s about being informed, being intentional, and being focused on the culture of the institution. I don’t think boards have had to do that, but if they don’t step up I think we’re going to be in worse trouble than we currently are.

TRUSTEESHIP: Terry, from what you’ve seen over your many years of working with public and private boards of all sizes and all levels of prestige, do you sense that boards are capable of having the kind of candor and transparent conversations on the most essential issues and challenges facing their institutions?

MacTAGGART: Yes, I think they can, but I would underscore Janice’s three points about how boards need to change if they’re going to address these issues. I think some more of them are going to get burned before they actually step up. One thing that boards need to accept now—as do chief executives, although I think they’re closer to the reality on this—is that crises are us. The laundry list, from scandals to more traditional emergencies like the floods in the Midwest, financial problems for small liberal arts colleges, particularly if they’re in rural areas, ideological conflicts, political conflicts, blackface, Title IX, or whatever the problem or crisis may be—it isn’t a static set of issues. Anyone who thinks that being a board member is just an honorary position is in for a rude awakening.

The first change for boards to implement in order to really embrace this new reality is to come to grips with the fact that they need to be curious, inquisitive. They also need to form a different relationship with their president. If something goes wrong we’re all responsible and we need to address it rather than cover it up. Can they do it? Sure. Will they do it? Well, they may need to be stung a few more times before that happens.

TRUSTEESHIP: Terry, how do we get public institutions that have to address much of their agenda in open meetings to deal courageously and have meaningful discussions about issues that really matter?

MacTAGGART: First of all, I think the odds of having state legislators or governors allow less transparency, less sunshine, are just about nil. So the answer must be to enable, train, develop, and prepare boards to have difficult conversations in the sun-shine, to exercise candor even if they’re being recorded. There are guidelines for that. But they’re between a rock and a hard place. If they’re not candid, sooner or later the truth will come out and they’ll pay a price for that. My recommendation is to become comfortable with having dif-ficult but important conversations with an audience present and let the people know that you are dealing with the tough issues facing your system or institution rather than just having a scripted kind of board meeting and behaving passively or playing to the audience.

TRUSTEESHIP: In the last 15 or 20 years AGB has begun to urge boards to broaden their understanding of effective engagement. Janice, how should boards define
their appropriate engagement in order to address today’s challenges?

ABRAHAM: Boards need a better understanding and comfort level of how things are working at the institution. It’s not their job to write the policies but it is their job to make sure that policies are refreshed and are current with the times. Policies on admissions, policies on gift acceptance, policies on academic freedom, whatever the particular policy may be. They need
assurance that an institution’s policies are implemented, and they need to see data that tell the story of oversight.

Not every campus has an internal audit function, but there are other ways to go about it to make sure, for example, that the admissions process has integrity and the values of the institution are clearly asserted, that the development office has integrity, and that the policies are clear. Boards do have an obligation not to get into the weeds or step into management’s prerogative. However, they must ask deeper questions of the president and his or her cabinet to make sure that there is an understanding that these things are working and they’re working well. Ultimately, it’s about accountability, and board members need to understand the scope of their responsibility.

TRUSTEESHIP: Terry, are boards holding their presidents accountable, are they really pushing presidents sufficiently for the information
they need to meet their fiduciary responsibilities? Do boards know what they need to know and when they need to know it, or are they perhaps a bit tepid to ask questions that might touch a third rail?

MacTAGGART: I think there are two great dangers here. One is the board that’s too tepid and doesn’t want to raise a tough issue, doesn’t want to offend the president. And the other extreme is the combative board—often it comes down to one or two trustees who are suspicious and are walking around campus looking for dirt. I think the fundamental thing is a fresh relationship between the board and the president. The rules have changed. And so when the board asks tough questions and is not satisfied with glib answers, but wants more depth, the president doesn’t take that
as a threat to their ego or their prestige, but rather as a challenge to become more forthcoming. I think casting the board in the investigatory role alone breeds problems. But if the board and the president work together, a lot of good things can happen.

ABRAHAM: On that point, I think board members need to be open and receptive. And that old adage “Don’t bring me bad news, just bring me answers” should be banned from the boardroom, because presidents need to be calm and say “Listen, there’s a challenge here, and this is how I’m thinking about it. I value your input, this is what I’m doing, this is how we’re addressing it.” Expecting the presi-dent not to bring difficult news, even bad news or heightened risks, is destructive and places the president in an untenable position. We need to change that dynamic between boards and presidents and not just have it be happy talk. It’s time for us to get serious. There’s a time for happy talk, but it shouldn’t dominate the board meet-ing. Transparency is the coin of the realm.

TRUSTEESHIP: So, how can presidents be encouraged to change the dynamic in the boardroom? Too often board agendas limit a board’s capacity to do the kinds of things that you have been talking about here. How do we get presidents to shape agendas that encourage them to deal with areas in which they can truly add value?

ABRAHAM: I really have to push back on this. It is not the job of the president to shape the agenda. That is the job of the board; it is the job of the board chair to shape the agenda. It’s up to the board to drive this. The president will respond to the board. Presidents can obfuscate, but only if boards allow them to. I think boards own the issue of crafting the agenda. I would never have a board meeting with United Educators without showing the agenda to the board chair several times, outlining what I plan to talk about, and asking “What are we missing? What do you think about this? “ Or pointing out what I’m worried about. That’s the conversation. And it’s not rote. Board members who put up with a rote agenda that looks like only the date has been changed, they own that. The president doesn’t own that, the board owns that.

TRUSTEESHIP: It wasn’t long ago that a number of people sat around a table at AGB and crafted specific concepts that became the heart of our new publication An Anatomy of Good Board Governance In Higher Education (AGB Press, 2018). The premise is that boards that have the right composition, the right focus, and an inclusive culture are more likely to be positioned to get governance right. Terry, how do boards ensure that they are positioned to get it right?

MacTAGGART: You underscored the importance of the composition of the board. As we reflect on these crises—the Title IX challenges, for example—if there aren’t enough strong women on the board there may not be appropriate sensitivity to that. The same with people of color. I’ve been working with a highly reputable college. The board is predominantly white male alums, and it’s very difficult for them to relate to and to get inside the character and the feelings and the values of many of their students today. As I mentioned earlier, crises are us. It’s either get ahead of them, as Janice suggested, by being inquisitive and demanding information, or paying the price down the line when they come up and surprise you. A board culture that prizes robust, open, critical, challenging conversations is likely to result in trustees walking out of the boardroom saying “Man, that was a great meeting. We really pushed the envelope and we’re better positioned to lead than in the past.” Good governance leads to better and more collaborative leadership and a stronger institution. Governance that doesn’t rise to that level invites problems.

ABRAHAM: Agreed. But I think the institution has a responsibility as well as the board to train board members, to help them understand the complexity of the issues and their responsibilities. It’s also the job of the administration to educate board members—trustees are running companies, they’re running charities, but they need to understand our business. The threats have increased, which means that we have an imperative to train them. The universities have an imperative to educate and socialize their board members.

TRUSTEESHIP: Why do you think it is that with all of the high-profile crises and scandals that have rocked higher education recently the issue that seems to have sparked the greatest public call for governmental engagement or oversight has been this most recent admissions scandal?

ABRAHAM: I think it’s the larger stage of power and privilege. Americans had lulled themselves into thinking that admissions was a fair game. That you work really hard, you do the best you can, you take the free SAT prep classes, et cetera. It’s bootstraps, Horatio Alger, all of those stories—that’s our myth, that’s our country. And then we find out that’s not it. At least in this case, that’s not it. And I think it hit at a core of the American myth, the American story, and it is really hard to stomach for all of us.

MacTAGGART: I think Janice is spot on. Education was considered the great equalizer. You could get an education and move ahead and enjoy the American dream. Well, suddenly not so fast, and this crisis is bleeding over to legacy admissions. You know, maybe there wasn’t any overt gift or contribution, but at one institution 20 percent of the admissions were legacy admissions, so what about opportunity for the other people? I think this ties into a larger national fault line, frankly, between the haves and the have nots.

TRUSTEESHIP: One final question: From your individual perspectives from the recent admissions scandal and other ethical challenges that you’ve been talking about how can institutions best protect themselves against some of these failures going forward?

ABRAHAM: Be informed. Understand what your risks are, what processes are in place, and be engaged in those. Act like a leader. As a board member you’re a leader. Act like you care, because you must. And be willing to support the president in what he or she does. My takeaways: be informed, be a leader, be intentional, and really understand your campus.

MacTAGGART: Foster a culture of integrity over a culture of prestige. Frankly, it’s the smart thing to do and it’s the right thing to do. Second, to think about these crises not in terms of crisis management but rather crisis leadership. How can you use the crisis to make the institution stronger, more robust in the long run. That phrase “never waste a good crisis” is worth thinking about when it comes to dealing with these. And finally, support your president and others who will take heat if they make tough decisions that anger groups of stakeholders addressing these problems.