Decisions, Decisions

By February 3, 2017 March 7th, 2019 Trusteeship Article

“Who should decide what?” That’s the question that animates (and complicates) governance. Although too complex a question to answer with a catchphrase, platitudes abound nonetheless, such as “Noses in, fingers out,” and “Boards determine ends, management determines means.”

Because the question defies easy answers and carries high stakes, few boards and executive teams squarely and systematically address the matter together. Instead, the parties periodically have abstract discussions about roles and responsibilities; litigate decision rights on a case-by-case basis; and grouse privately about the inability of the other party to negotiate and respect “legitimate” jurisdictional claims. As a result, everyone’s exasperated and no one’s closer to clarity. What can boards do to advance good governance and better define roles?

THE PROCESS

In recent years, I have worked with the boards and senior staff of several colleges and universities to approach the issue differently and achieve better results, namely a more refined notion of “Who decides what and why?” We proceeded inductively, from specific to general, from practical to conceptual.

First, a small group of board members and staff develops a list of concrete, plausible situations that implicate decision rights— either hypotheticals developed locally or real-life incidents from peer institutions. (Avoid events that actually occurred on the home campus so as not to reopen the discussion.) The list should encompass the board’s traditional spheres of responsibility, for example, academics, facilities, finances, and student life.

Next, convert the list into a survey to be completed by all trustees as well as executive officers who interact regularly with the board. (Each person should retain a copy of the completed survey for reference when the board and staff meet to discuss the results.) Responses should be anonymous except for a designation as either board member or staff. For each item, there are three choices:

1. The decision should be made by the president (or appropriate senior officer) with the board informed in a timely manner.

2. The decision should be made by the president after discussion with the board (or appropriate committee of the board).

3. The decision should be made by the board after discussion with the president.

Exhibits A and B offer sample decision-making scenarios for a four-year college and a research university, respectively. Note that some hypotheticals may be suitable for both.

Exhibit A

THE DISCUSSION

Board and staff member responses should be tabulated separately and together in order to enable intra-group and intergroup comparisons. The data should be presented as follows and distributed seven to 10 days prior to the discussion by board and staff:

  • Items with greatest agreement among all respondents.
  • Items with least agreement among all respondents.
  • Items with greatest disparity between board and staff member responses.
  • Items with the least intra-group consensus.

Discussion questions. The conversation might be organized around four questions:

1. For items with the greatest consensus among all respondents, what criteria or signposts make these decisions so obvious to so many?

2. For items with the greatest intergroup or intra-group differences of opinion, what rationales and considerations prompted a particular response? What’s the case for each of the three possible decision points? What are the counterarguments?

3. Did the discussion prompted by the two questions above change any minds about the proper province for the decisions and thereby lead to a stronger consensus? If not, how should we manage different expectations about respective roles and decision-making rights?

4. What are the advantages of strong intergroup and intra-group agreement? When might disagreement about where decision-making authority lies be beneficial? For instance, a split response within the board might neutralize equally undesirable extremes that position board members as either passive bystanders or intrusive surrogates.

These questions aim, above all else, to elicit the usually tacit premises and assumptions that inform judgments board members and administrators make about where to locate various decisions and why. It is an attempt to understand better each other’s thinking about optimal balance of power and a preferred decision-making process—topics rarely engaged frontally in the boardroom. In today’s campus vernacular, the exercise offers board and staff members “safe space” for a sensitive conversation that might not otherwise occur.

Exhibit B

DECISION CRITERIA

The process affords an opportunity to extract from concrete examples some guidelines to elucidate where best to situate decision-making authority. In the discussions I have facilitated, seven criteria have emerged that boards and staff apply implicitly or explicitly to decide who decides.

1. Fiduciary responsibility. Does the decision invoke the board’s fundamental fiduciary responsibilities, for example, on setting mission; approving strategy and policy; and ensuring quality, sustainability, and integrity?

2. Risk. Does the decision present substantial financial, reputational, or ethical risks or endanger safety?

3. Consistency. Does the decision represent a significant departure from established policy, strategy, or precedent?

4. Symbolism. Does the decision implicate core values that could be contravened?

5. Competence. Where does relevant expertise and comparative advantage reside to analyze and decide the issue?

6. Support. Would board actions legitimate the decision and thereby enhance prospects for a favorable outcome?

7. Morale. Would a decision by the board (versus management) signal lack of confidence and demoralize staff?

Taken together, these seven criteria constitute a reference for board members and executives to consult when the locus of a decision seems uncertain or contested. The template, adapted or expanded as deemed suitable, enables participants to organize the discussion, seek compromise and consensus, and understand the basis of divergent points of view.

CONTEXT

Even with this suggested checklist, the calculus will vary from campus to campus due to institutional characteristics. Most obviously, some matters at public universities—for example, whether to accept a strike, add same-sex health benefits, or outsource campus security—may be governed by state regulations or statutes, or decision-making authority may rest with a system office. And even when these decisions can be rendered locally, board members attuned to political as well as operational considerations may seek to be party to the dialogue and the decision.

Like public or independent status, institutional stature also affects decision-making practices. Simply stated, some colleges or universities can abide mistakes and rebound more easily than others. For institutions with scant financial and reputational capital, ostensibly minor decisions may loom large from a board’s perspective due to smaller margins for error and less organizational resilience. Therefore, trustees of relatively fragile colleges may be more actively engaged over a broader spectrum of actions as advisers to management or as decision-makers, whereas more secure and more complex institutions may delegate these very same decisions deep within the administrative hierarchy.

At all institutions—public or independent, sturdy or precarious—continuity and quality of leadership also affect decision-making rights. Board members are more apt to entrust more decisions to the president as the incumbent develops a successful track record or, conversely, delegate fewer decisions as the president falters. A first-year CEO will probably experience somewhat constrained latitude to decide certain matters until the newcomer wins the board’s confidence. In short, a president’s tenure is usually tightly coupled with decision-making authority.

IN CONCLUSION

Exemplary boards usually already have in place culturally congruent and contextually appropriate decision-making practices and protocols—a logarithm—that prevail from one cohort of trustees to another and from one presidency to the next. “Who decides what?” becomes, as former President Lawrence Bacow of Tufts University has observed, “a matter of common law.”

On the many campuses where board members and executives skirt the topic or adjudicate decision points case-by-case, the board and administration would do well to develop together explicit yet flexible guidelines sensitive to context and based upon a checklist of relevant criteria. Start with hypotheticals, conclude with reality.