While boards have a fiduciary responsibility to exercise sound crisis leadership they are sometimes blind to the potential for a serious crisis at their institution. The list of current crises engulfing higher education calls for greater integrity and a heightened sense of responsibility.
The call for the board to assert active leadership to resolve crises finds many board members unprepared, confused, and conflicted. Most disconcerting is when the board itself becomes the target of outrage from students, parents, the public, and politicians over its failure to anticipate and prevent the crisis, to address its root causes, or to express empathy or contrition. Models for dealing with emergencies brought on by such natural disasters as fires or floods are well developed and widely avail-able. But planning for more complex crises that prominently feature ethical, political, social, legal, and financial dimensions can be addressed only by boards that are open-minded, creative, and diverse in back-ground and thought. They must display willingness to “own” the problem and take action with their presidents to lead their institutions through the turmoil.
The list of current crises engulfing institutions and their boards suggests how prevalent these disruptions have become. The roster includes multiple incidents of sexual abuse, athletics scandals, admissions bribery, racial conflict, hate crimes, gun violence, executive malfeasance, board malfeasance, tragic accidents, financial distress, college closings, hazing deaths, no confidence votes, and myriad natural disasters from floods to earthquakes to tornadoes.
Many crises share common features. They appear to begin with a trigger event—a student reports a sexual violation, a white supremacist announces a march on campus, for example. But in fact many crises that appear suddenly have actually been smoldering for a long time, perhaps unnoticed by the president and unreported or underrepresented to the board. Crises feature victims who merit broad public sympathy—the family of a student who dies of alcohol poisoning in a fraternity house, a sexually exploited undergraduate—yet all too often boards are slow to respond, eschew responsibility, or, heeding the advice of their attorneys, fail to offer an apology or express compassion.
Crises call into question the competence and moral authority of leaders—executives and trustees alike—who ignored early warning signs, failed to investigate com-plaints, or remained blissfully ignorant of the possibility that a crisis that flourished elsewhere might well erupt closer to home. First news of a crisis produces stress, uncertainty, and scapegoating among board members who failed to notice problems on the horizon, are ill equipped to manage and communicate during the crisis, and dis-agree over solutions.
Chaos in the boardroom intensifies if the board itself is the target of criticism. Chair resignations are common following a period of Strum und Drang while boards sort themselves out and identify new leaders untarnished by the crisis. As painful as they may be, however, crises often have an upside. Crises offer opportunities for boards to display the virtues of honesty in acknowledging the seriousness of the crisis and humility in accepting blame where appropriate. The best boards exercise courage in dealing with crisis and creativity in using it to build a stronger institutional culture.
It is safe to predict that crises will continue to jolt higher education in this era of disruption, social unrest, and political divisiveness. However, boards can prepare themselves to lead during inevitable crises. They can practice sound governance by candid and robust discussion of all the challenges and risks before them. Boards can learn to become more adroit at crisis management and communications with stakeholders as events unfold. And they can take advantage of the crisis—however troublesome it may be—to make the board and its institution stronger, more alert, and more responsive going forward.
LESSONS FROM A CRISIS
The Michigan State University (MSU) crisis illustrates the vulnerabilities of a board unprepared to manage much less lead through a serious crisis, in this case the horrific revelations of Lawrence Nassar’s abuse of more than 250 young women and 1 young man. It offers lessons in crisis leadership that apply well beyond events in East Lansing. The Nassar scandal began in the 1990s, when this osteopathic physician at Michigan State and the doctor for the United States women’s gymnastics team molested young athletes under the guise of medical treatment. Early complaints to university officials were for the most part ignored or minimized. A brave young woman gymnast first publicly accused Nassar in September 2016. The nation’s euphoria over the success of the US women gymnasts in the 2016 Summer Olympics quickly turned to shock and outrage at the abuse and betrayal of some of these same young women.
Week-long testimony in January 2018 that captured the nation’s attention and culminated in the resignation of Lou Anna Simon, MSU’s long-serving and once widely respected president. Prosecutors subsequently charged Simon with lying to police investigators regarding how much she knew about Nassar’s misdeeds. She could face prison time and fines. The board appointed former Michigan governor John Engler, as her interim replacement. A year later Engler himself was forced out following a series of blunders that included offering a cash payoff to a victim and suggestions that the victims were enjoying the limelight.
This case highlights all too well the importance of board leadership, and the consequences of governance failures. The lessons of the Penn State University scandal should have taught the president and the board to heed warning signs of similar abuses in Michigan. Moreover, early reports to the president of abuse in the gymnastics program failed to elicit further investigation or board attention. The presence of a former football coach and athletics director on the board may have stifled criticism of problems within Spartan athletics. The board demonstrated stunning passivity in failing to address the crisis as it unfolded. As reported in the press, the board retained outside counsel to monitor social media and advise at a cost of half a million dollars. Whatever the tenor of that advice, during this period board communications continued to be out of touch with the growing public outrage.
Potentially positive actions were mishandled by a board that appeared insensitive. A supposedly independent investigation squandered the board’s credibility when it was revealed that it was conducted by the university attorney. Only one trustee attended a listening session touted as the board’s willingness to hear from the public. The lack of board participation was quickly interpreted as indifference. Additionally, the board failed to clean its own house in a timely way. The member who had served as athletics director during part of Nassar’s employment and who is also named in a lawsuit for not acting on reports of abuse remained a trustee until the end of November 2018. Finally, in naming the combative Engler as the interim president, the board picked an ill-suited individual to communicate its concern for the young student-athletes who should have been the top priority. It is only with the election of new trustees and a third president that the tone of board communications has shifted from self-absorption to concern for the victims and a commitment to do better.
While this case illustrates board leader-ship that failed during each of the three distinct, though overlapping aspects of leading in a crisis, it does offer important lessons. Boards need to actively engage in anticipating and planning for crises. Transparency between a board and its president is essential, especially in acknowledging the early warning signs of a crisis. The board and president should together manage crises as they unfold (unless one or the other is a prime suspect) including communications with a world of stakeholders. And both must address the systemic problems under-lying the crisis while they lead the institution to a better future.
ANTICIPATING AND PLANNING FOR THE INEVITABLE
By prioritizing a culture of integrity over brand protection boards actually build stronger reputations for their institutions. Boards and their executives must repeatedly affirm that whistleblowers will be protected and rewarded, misdeeds will be punished, and cover-ups will not be tolerated. Numerous examples demonstrate that ignoring, denying, or hiding malfeasance results in more damage to an institution’s reputation for integrity than honestly admitting fault and prompting reforms. For example, one of the largest public universities in the country, itself recovering from a crisis triggered by blatant misspending, offers a secure, confidential communications line to encourage timely reports of misdeeds. The university’s view is that it is better to weed out false claims than to remain in the dark.
Systematic efforts to anticipate crises and prevent or ameliorate their effects help boards foresee probable crises, if not their exact timing. Formal risk assessment pro-grams have grown into an art form widely available with the help of consulting firms. The danger, however, is that risk assessment processes devolve into outsourcing board responsibility. Discussions of the annual risk assessment report may become so routine that boards become complacent. Risk assessment is often passed entirely to management. Some boards assume that the risks identified cover all of the possibilities. Looking at crises and scandals elsewhere should signal the likelihood of problems within the institution. For example, when nearly 50 percent of undergraduate women at Duke University report being sexually assaulted since enrolling, no board can assume that its campus is free of sexual violence.
MANAGING THE CRISIS AND COMMUNICATIONS
The most effective boards in a time of crisis are composed of a diverse group of engaged members who fully participate in robust and candid dialogue, willingly listen to advice and criticism, and enjoy a mature relationship with their presidents. Boards with a healthy governance culture are much better equipped to manage a crisis than those inattentive to the most important issues, divided among themselves, or more concerned with the school’s historic image than current realities. Governance flaws within the board and between the board and executive leadership create, contribute to, or exacerbate a crisis.
The makeup of the board is critical when it comes to understanding a crisis brought on by the impact of social, economic, and demographic change. A board composed largely of older white male alums at a prestigious liberal arts college found itself unable to understand or cope with drastic enrollment declines occasioned by shifting demographics. The board as a whole remained oblivious to the consequences of the falloff in appeal of a traditional liberal arts degree as well as the need to enroll more first-generation students, immigrants, and people of color. Recruiting younger members from diverse back-grounds would help this board deal with the existential crisis facing the college.
Time spent on understanding the immediate crisis and its underlying causes is essential to addressing it. A board accustomed to a heavy social calendar at its meetings failed for too long to devote time to discussing the serious challenges that imperiled the college. Though generally aware of unsustainable tuition discount rates, the board never scheduled enough time to fully discuss causes and solutions. And, too, boards that allow themselves to be dominated by a strong-willed chair or small clique usually fail to respond effectively in a crisis. Athletic boosters on the board struggle to remain objective when it comes to allegations of violations by athletes or their coaches. Recent scandals leading to the departure of athletic directors, coaches, and board members at schools with big-time athletic programs underscore the need for vigilance and oversight by the full board.
Strong and capable presidents are to be treasured in this time when change leadership is much in demand. However, overreliance on the authority of a dominant president is dangerous. Boards that allow themselves to be overawed by the executive, however talented and trustworthy, risk lopsided governance that leaves the board unprepared to assess risk and deal with a crisis, especially when that crisis involves the chief executive or senior staff.
Faculty votes of no confidence in the president are best addressed by boards that take independent assessments of the president’s performance. Listening to objective advice from experts not emotionally linked to the crisis is essential to gaining perspective on the crisis itself and managing through it. When governance flaws create or contribute to the crisis, AGB is frequently called in to assist. The willingness to heed recommendations for reform signals a board’s acceptance of responsibility and commitment to do better. Of course, external advice does not replace the need for board wisdom. Concerns over legal liability are legitimate but should not lead institutions to offer victims cold responses crafted by attorneys. Lawyerly advice is well worth listening to but should not dictate strategy in the board’s response to crisis.
NEVER WASTE A CRISIS
There are few crises, however painful or tragic, that do not offer opportunities for improvement in the institution’s culture and operations. At the very least, addressing the root causes of the crisis—a culture of indifference to sexual assault, lack of oversight and accountability preceding financial malfeasance, for example—will help ensure they do not reoccur. Michigan State’s new trustees and new president are showing a willingness to accept responsibility and make changes that will restore the integrity of that great institution.
Addressing the crisis itself is the first order of business, but seizing the possibilities opened by the crisis to make overdo change is an opportunity not to be missed. Tulane University presents an example of a board and president’s commitment to reimagine itself to become a stronger, more attractive institution in the wake of a four-month closure following Hurricane Katrina—good use of a natural disaster. The renewal plan, which included program closures, mergers, and the dismissal of some tenured faculty was necessitated by the flooding of the campus and could not have been accomplished without the crisis. Thanks to skilled presidential and board leadership, Tulane emerged with sound finances and a very strong academic reputation. Similarly, faced with near bankruptcy and the possibility of selling itself to a proprietary institution, the board of a private university in the Midwest chose instead to “become what we were created to be,” as its recovery plan proclaimed, recruiting a visionary and energetic new president, reorganizing its offerings, and ultimately emerging as a vital institution with substantial growth in its enrollment and endowment and splendid new facilities. Governance confusion following the tragic death of a student-athlete at the flagship of a major public system led its board to take positive steps to restore public confidence and a new chair apologized forthrightly. With the help of AGB, the board has launched a comprehensive review of governance and leadership that promises to strengthen both going forward.
Most boards want to exercise sound crisis leadership but sometimes remain oblivious to the potential for a serious crisis at their institution or do not prepare themselves to lead when the crisis begins to unfold. Crisis leadership requires boards to foresee potential challenges, to manage the crisis and communicate effectively, and to use the crisis as a springboard to stronger institutional culture and practice. Some crises—such natural disasters as floods and storms, for instance—lend themselves to clear solutions that can be implemented to fit the context. More complex crises with ethical, political, and social dimensions require more creative solutions. A diverse board versed in the sound governance practices of listening to advice and open-minded discussion followed by the courage to act represents the best preparation for addressing these increasingly frequent disruptions.
AUTHOR: Terrence MacTaggart, PhD, is a former chancellor of both the Minnesota State University System and the University of Maine System, and a senior fellow of AGB. His book on crisis management will be published by AGB Press in spring 2020.
Share on LinkedIn
