Post Covid, Managing Risks Is More Important Than Ever

By Christopher Connell    //    Volume 30,  Number 4   //    July/August 2022
Takeaways

  • Be prepared to be agents of change to maintain institutional vitality.
  • Pay close attention to student persistence and graduation rates and support efforts to make them equitable.
  • Uphold democratic values and stand firmly behind principles of free speech and civil discourse, even amid disruptions and protests.
  • Develop new leaders and seek out and prepare the next generation of board members.
  • Be aware of sources of risks and the importance of managing them proactively.

It isn’t certain who coined the phrase “never let a good crisis go to waste”— some credit the crafty 16th-century Italian diplomat Niccolò Machiavelli, others the 20th-century wartime British Prime Minister Winston Churchill—but college and university governing board members should take that wisdom to heart as they chart a course for the future of their institutions in the post-COVID era.

No college had coping with a pandemic in its strategic plan before 2020, but cope they did, displaying more resilience and adaptability than anyone could have predicted. Now they face the continued challenge of keeping their footing at a time of financial uncertainty and erosion of public confidence in higher education. As one college president put it, “As we think about planning post-pandemic, what’s most important to recognize is that things are never going back to what we call normal.”

Not one of the vexing problems higher education faced prior to 2020 has been remedied or even ameliorated to any significant degree. Some have grown worse. Consider the rising costs of a college degree and the lingering mountain of student loan debt. Declining enrollments. Fractures in the once-cherished tradition of shared governance. Concerns about academic freedom and free speech on campus. Demands for equity and racial justice and, at the same time, political resistance to diversity initiatives in admissions and hiring.

The challenge before governing boards now, says business strategist Jeffery S. Perry, chair of the board of trustees at Babson College, is to “make sure the lessons learned through the depths of the COVID crisis can be leveraged going forward—lessons around agility, around different delivery models, be it in person, online, or hybrid. Those lessons we learned in survival mode will also be applicable as we continue to revive and then thrive in the future.”

The Association of Governing Boards, after extensive discussions with college and university presidents, trustees, consultants, and staff experts, in April released its fifth biennial Top Strategic Issues for Boards report identifying what it regards as the five most pressing concerns facing trustees in 2022 and 2023. They are:

  • Ensuring institutional vitality;
  • Improving outcomes for students;
  • Strengthening civic education and democracy;
  • Grooming the next generation of leaders; and
  • Managing a welter of risks.

This article seeks to help board members wrap their arms around each of these challenges so they can better face them—and not let a good crisis go to waste.

Strategic Issue Number 1

Institutional Vitality

Like a tsunami that crashes upon the shore, the pandemic has altered the landscape of higher education. Adjustments made on the fly may last, most notably the shift to more online classes and greater reliance on technology. Programs and majors eliminated at some schools are unlikely to be restored. The speed at which changes are taking place has accelerated. It’s an open question whether the slump in enrollment (including international students) will be reversed. Underused dorms and facilities could become white elephants and an expensive burden to carry; boards likely will have to drive any discussion about shrinking spaces and, where necessary, reducing staff.

Public and private nonprofit institutions can also expect more competition from for-profit providers of degrees and credentials. Higher education needs “to be refitted for the global, digital, knowledge economy” or risk being supplanted by nontraditional providers, Arthur Levine, former president of Teachers College, Columbia University, told Higher Ed Dive. The biggest mistake institutions can make is to think this “is only going to happen to other institutions—that they’re special, they’re different, they’re unique.”

While the dire prediction made in 2013 by the late Harvard Business School economist Clayton M. Christensen that half the 4,000 U.S. colleges and universities would be gone within a decade did not come to pass or come anywhere close—Higher Ed Dive catalogued just seven closures in 2021—the financial situation remains precarious for many.

It “would be a mistake to assume that higher education is no longer vulnerable,” AGB President and CEO Henry Stoever cautioned in the foreword to the 2021 AGB publication Higher Education Business Models Under Stress: Achieving Graceful Transitions in the Academy. The book’s authors, Melody Rose and Larry D. Large, wrote that while the pandemic triggered “sudden and stark changes to collegiate life… the flaws in the higher education business model were there long before the virus hit our shores.” More mergers, partnerships, and, yes, closures seem inevitable. The consulting firm Deloitte says colleges must learn to live and manage their finances “in the new normal of perpetual discomfort.”

Declining enrollments feed those worries, with 1.1 million fewer undergraduates in 2021 than before the pandemic struck. Student persistence remains cause for worry. According to the National Student Clearinghouse Research Center, only 74 percent of the freshmen who enrolled in 2019 returned the following fall. The undergraduate transfer rate has plunged 16 percent over two years, most likely due to fewer community college students moving up to baccalaureate institutions.

Sending kids to college was once the heart of the American dream. Now parents and students have doubts, despite unassailable evidence that college graduates earn more than those with just a high school diploma. But 43 million adults are saddled with student loans exceeding $39,000 on average, prompting families to question the investment.

The erosion of public confidence in higher education is grave cause for alarm. Only half of adults polled by the Pew Research Center in 2019 believed that colleges and universities have a positive effect on the country’s direction. Almost four in ten said they had a negative impact. Those views are split along the same lines that divide the country in the voting booth, with three in five Republicans harboring negative views and two-thirds of Democrats holding positive ones. Rebuilding public support will be difficult and is not something that can be achieved quickly. Boards need to do everything within their power to restore that confidence, and the place to start is to find ways to make college less expensive.

In 2021–2022, the average price of tuition and fees (before scholarships and discounts) for four-year students was $10,740 in-state at public colleges and universities and more than $38,000 at private, nonprofit colleges. Room, board, and other expenses push those averages above $27,000 at public campuses and approach $56,000 at private ones, according to the College Board. After inflation, the real costs of college have doubled since 1992.

While many private schools deeply discount tuition sticker prices to keep enrollment up, and count on families that can afford to pay full price to subsidize those who cannot, that Robin Hood practice may leave a sour taste in customers’ mouths. With the pandemic having disrupted what has been called the “high touch” in-class teaching method of delivering instruction, boards will have to seriously weigh steps to make college more affordable. As financial stewards, boards should take a hard look at whether and how much administrative bloat contributes to higher tuition and other costs.

At the same time, they should continue to push to find new ways to generate revenues, including providing training and certification and finding other ways to meet the needs of older students. As one college planner put it, traditional liberal arts colleges must become “more adult friendly.” Boards must be agents of change that push for serious consideration of mergers, acquisitions, partnerships, and collaborations. They should keep the pressure on administrators and faculty to be open to academic restructuring if that is what it takes to secure their institution’s future. Technological advances have changed the way almost every industry conducts its business; higher education will be no exception. Those colleges that fail to make necessary course shifts—including jettisoning weak programs and bolstering those that appeal to students and employers—risk the collapse, slow or sudden, about which Christensen warned.

Strategic Issue Number 2

Improving Outcomes for Students

Many college students never complete the journey to a diploma, a reality that sows further doubts about whether the investment is worthwhile. It is paramount that boards pay close attention to what is being done to improve student persistence and graduation rates and support efforts to make them equitable across racial and ethnic groups. With strong support from their boards, colleges and universities have focused for decades on increasing the diversity of their student bodies. Now they must concentrate on achieving equitable outcomes as well.

While two-thirds of all high school graduates enroll in college, only 36 percent of American adults aged 25 and older have earned bachelor’s degrees. Coincidentally, 36 million Americans—including men and women in their 40s and 50s—attended college for at least a while but earned no degree, according to the National Student Clearinghouse Research Center. Black and Hispanic students drop out at higher rates than White and Asian students. Many of the advanced countries with which the United States competes economically turn out higher percentages of college graduates. This is an enormous waste of talent at a time when most of the desirable, remunerative jobs require levels of education and training beyond high school.

Whatever their age, students enter college with a host of needs, especially students who are economically disadvantaged. As AGB’s Council for Student Success expressed in a recent blog post: “If a student is homeless, food insecure, and/or lacks childcare and family support, among other necessities, this can impact their ability to succeed. Boards must realize—often for the first time—those basic needs are academic needs, and if they wish all students to succeed, then organizational cultures will in many cases need to change.”

No discussion of how to improve outcomes for students can ignore the issue of meeting the growing need for mental health services. Seventy-two percent of college and university leaders surveyed by the American Council on Education and the TIAA Institute in spring 2021 cited the mental health of students as their most pressing concern. As many as 72 percent of presidents ranked it at the top, followed by their concern about the mental health of faculty and staff (58 percent)—well ahead even of worries about the long-term financial viability of their institution (41 percent). Alarms had been sounding long before the pandemic over how well—or poorly—colleges and universities were addressing campus mental health needs.

Enrollment worries vex boards and presidents at a wide range of institutions. As already pointed out, the pandemic hit community colleges especially hard. But with a dip on the horizon in the size of high school graduating classes, boards need to encourage schools to cast a wider net. Those geared primarily to meeting the needs of four-year students coming straight from high school should consider how to meet the needs of older adults looking to finish their degree at last or to acquire new skills required for today’s fast-changing and more technically demanding job market. Boards should signal their strong support for innovative efforts to expand their institutions’ reach and mission.

It is an essential part of a governing board member’s job to know in granular detail what their institution is doing to improve persistence and graduation rates. Hitting enrollment targets is important, but it may be even more crucial for boards to watch what happens after students matriculate. Some students may decide to abandon or postpone indefinitely the pursuit of a degree for financial or other personal reasons, including factors over which institutions have no control. Nonetheless, retention and graduation rates are good barometers of how well or poorly a college is performing, not just how individuals are faring. Forty percent of full-time students hold down full-time jobs, with some working 35 or more hours each week on top of their academic work. Trustees should know what these figures are at their college, and be familiar with other demographics, including what percentage of students are parents and need childcare, and how many are immigrants and the first in their families to attend college. Board members need all this information not to micromanage, but to get a better picture of what the institution can do to better meet student needs.

Board members should ask for regular updates on how long it typically takes their institutions’ students to earn associate’s and bachelor’s degrees, and how effective remedial classes are in helping students unprepared for college work. How many of them advance to regular, for-credit courses? Can juniors and seniors get all the courses required by in-demand majors such as engineering, nursing, and education so they can graduate on time or are they slowed by limited availability of classes? Problems can be fixed, but it takes more capacity and resources. Boards can help generate those improvements.

At a time when police killings of unarmed Blacks have aroused new concerns about social justice and equal rights, colleges have a vital role to play in closing the racial divide. Trustee leadership in support of diversity and inclusion “remains nothing short of essential to a thriving citizenry and nation,” the AGB Board of Directors declared in its 2021 Statement on Justice, Equity, and Inclusion and Guidance for Implementation. Despite progress, “it is painfully clear the U.S. system of higher education—both public and private nonprofit— has never been the level playing field some imagine it to be. Indeed, it is strewn with barriers to success for significant numbers of our students, faculty, and staff. A key responsibility of trusteeship is to identify these impediments and remove them.”

The AGB Council for Student Success has further stressed: “Boards and presidents need to embrace the challenge of having uncomfortable conversations about race, ethnicity, and equity issues; get comfortable having these difficult conversations; and model this for our campuses.”

In this, as in other matters of strategic importance to their institutions, boards need to accept and understand that the responsibility for overseeing the execution of those strategies rests with them.

Strategic Issue Number 3

Strengthening Civic Education and Democracy

Criticism that American colleges and universities have failed to adequately teach students the importance of embracing democratic values is not new. The subtitle of The Closing of the American Mind, philosophy professor Allan Bloom’s surprise 1987 bestseller, was How Higher Education Has Failed Democracy and Impoverished the Souls of Today’s Students.

But amid the political rancor and partisan bitterness that now divide many Americans, the issue of whether the academy is doing enough to produce citizens committed to the American experiment in democracy has taken on new urgency. Tens of millions of citizens believe the 2020 presidential election was stolen. Long after the last Jim Crow laws were stricken from the books, liberals now decry a wave of legislation they fear will make it harder for minority citizens, in particular, to cast votes.

Nowhere was higher education’s democratic purpose stated more emphatically than in the Truman Commission’s landmark 1947 report, Higher Education for American Democracy. “The first and most essential charge upon higher education is that … it shall be the carrier of democratic values, ideals, and processes,” the presidential advisers declared in a far-sighted report that shaped the sector’s rapid expansion in the decades that followed. Its clarion call echoes across the years:

It is a commonplace of the democratic faith that education is indispensable to the maintenance and growth of freedom of thought, faith, enterprise, and association. Thus the social role of education in a democratic society is at once to [e]nsure equal liberty and equal opportunity to differing individuals and groups, and to enable the citizens to understand, appraise, and redirect forces, men, and events as these tend to strengthen or to weaken their liberties.

Even earlier, education reformer John Dewey famously wrote, “Democracy has to be born anew every generation, and education is its midwife.” And AGB’s Guardians Initiative, in its 2018 report, Renewing the Democratic Purposes of Higher Education, reaffirmed that, “Democracy and higher education are inextricably linked.”

Teaching democratic values does not mean choosing sides in political debates. There is room in classrooms and campus gatherings for vastly different views on policy, political ideologies, and politicians. But support for democracy and democratic values, including protecting the right of every citizen to vote and encouraging them to exercise their franchise, is a given. Boards must articulate their unwavering support for free speech and civil discourse. They should stand firmly in support of presidents who uphold this principle, even amid disruptions and protests.

Johns Hopkins University President Ronald J. Daniels, in his book What Universities Owe Democracies (2021), described his dismay upon moving from Canada to the United States about how little students in high school—including his own children—were taught about core democratic ideas and institutions. Universities, he added, “have remained, at best, bit players in the project of educating a democratic citizenry. In truth, they ought to be a bulwark, bolstering a system of self-governance that is more fissured and fragile than at any time in decades.”

Daniels noted, “Making education for democracy a core element of higher education’s mission will face its own obstacles, and maybe tougher ones.” And he added, “Chief among them will be the political and ideological divisions, often bitter and unyielding, that can turn any conversation about common values into a ferocious encounter. But we are at a rare moment when the left and the right seem to be aligned behind the idea that more civic education is crucial.”

Daniels urged higher education leaders to make the most of this moment: “Colleges and universities are indispensable to the democratic project. Besides educating citizens, they are among the institutions in our society with the greatest capacity to launch students from marginalized or under-resourced backgrounds up the social ladder. They are stewards of fact and curators of knowledge. They are seedbeds of pluralism, bringing together students and teachers from all parts of society. As institutions, they are interwoven with democracy’s ends and values.”

The AGB Guardians Initiative’s Renewing the Democratic Purposes of Higher Education report also noted that, “Democratic purpose in American higher education has a long and meaningful history, though in every generation it has been challenged by forces within colleges and universities and in American culture.”

The crises today “in democracy and higher education are real, and those who have the privilege to lead must face them with imagination and resolve,” it said.

Teaching democratic values does not mean stifling dissent and pushing a partisan agenda. It does mean instilling respect for the views of others and recognizing one’s obligations to community and country.

As a practical matter, boards should require administrators to conduct a rigorous examination of the general education curriculum to see how and where students are learning the obligations of a responsible citizenry and where changes may be needed to ensure they do.

Governing boards have both a responsibility and an opportunity to ensure that their institutions fulfill their role as engines of democracy. Voluntary service on a board is itself an example of civic engagement and carries with it an obligation to uphold free expression, keep an open mind, and avoid partisanship. Members can exemplify values the college seeks to instill in students, namely the ability to form and express reasoned opinions, hear and respect the viewpoints of others, and strive to seek consensus, not narrow, divisive advantage. Pluralism, not partisanship, is a bedrock democratic value. Again, at this time of deep cleavage in the American body politic, colleges and universities must seek the higher ground, and they need strong, principled leaders to guide them there.

Strategic Issue Number 4

Grooming the Next Generation of Leaders

No single decision a board makes may be more consequential than its choice of a new president or chancellor. More and more boards are facing those decisions, sometimes much sooner than expected. The challenges of coping with the pandemic—facilitating remote instruction, quarantining sick students, enforcing vaccination and mask edicts, dealing with revenue shortfalls and unforeseen major expenses, and many others—could accelerate the turnover, although the current evidence is mixed. On average a college president serves for 6.5 years, according to the American Council on Education’s 2017 American College President Study. The average age of presidents was 63, and one in nine was older than 70. Seven in 10 were men, and fewer than one in five was a racial minority. The American Council on Education (ACE) is currently conducting its next survey, with results due in 2023.

Governing boards, too, are graying and members must look to help replenish their own ranks. As in the choice of a president, prime objectives for many boards are achieving greater diversity and drawing from a wider range of talents than the traditional mix of business executives and benefactors. The AGB 2020 Trustee Index found that only 29 percent of board members were under 60 years old. Almost a third (32 percent) were in their 60s, and nearly two in five (39 percent) were 70 or older. Sixty percent had served five years or longer. At a time when institutions of all types are seeking to increase diversity of students, faculty, and staff, 84 percent of trustees were White, and 60 percent were male.

Ninety-three of the 780 institutions in 11 states accredited by the Southern Association of Colleges and Schools hired new presidents in 2021. AGB Search helped 28 institutions conduct presidential searches that year, a 12 percent increase over the year before. The Chronicle of Higher Education counted 107 presidential resignations in 2021 compared to 70 in 2020, although both figures were lower than the 123 in 2019, before the pandemic. (The Chronicle figures do not count presidents forced out or those who stepped down due to illness.)

A number of presidents have specifically mentioned the pandemic as the reason for their departure. Cecilia McCormack, president of Elizabethtown College, stepped down after just two and a half years, citing family reasons. “I am proud of the work we have done to keep our college community safe during the ongoing COVID-19 pandemic,” she commented. “However, like so many others among us, the pandemic has also reinforced for me the importance of prioritizing what’s most important in our lives.”

George Washington University President Thomas LeBlanc said in announcing his resignation after barely four years, “The course of my presidency was disrupted by the pandemic that had to become the priority over the last 14 months.” LeBlanc’s relations with faculty were frayed from a short-lived proposal to shrink undergraduate enrollment by 20 percent, while steering more students to majors in science, technology, engineering, and math (STEM).

Fallout from mishandling of sex abuse scandals continued to haunt some presidents. San Jose State President Mary Papazian resigned in October 2021 over allegations that the university failed to protect female athletes against abuse by its director of sports medicine. The university agreed to pay $1.6 million to 13 former students. Papazian initiated a probe in 2019, a full decade after students first raised complaints. “My heart, apologies, and prayers continue to be with those students who suffered a breach of trust during their time at the university,” she said.

Oregon State University (OSU) President F. King Alexander resigned in March 2021, a week after trustees placed Alexander, formerly president of Louisiana State University (LSU), on probation for mishandling allegations of sexual misconduct by LSU’s football coach. The OSU Board of Trustees initially was going to keep Alexander on the job, but backlash led it to change course. The board initially “believed it was possible for President Alexander to repair the broken confidence and trust in his ability to lead OSU,” said Board Chair Rani Borkar, but “we now know that rebuilding trust is no longer possible.” The board commissioned an independent review of how Alexander was vetted—a lesson for other institutional leaders to note.

Many presidents retire in the normal course of events, of course. The University of Pennsylvania’s Amy Gutmann stepped down after 18 years and was appointed U.S. ambassador to Germany. Other long-serving presidents in the retirement queue included Freeman Hrabowski at the University of Maryland, Baltimore County; Morton Schapiro at Northwestern University; Joseph McShane, S.J., at Fordham; and William Harvey at Hampton University.

While these vacancies create challenges, they also present opportunities for colleges to bring greater diversity to the leadership ranks. More than a third of the presidents and chancellors hired from mid-2020 to late 2021 were racial minorities, 50 percent more than in the previous 18 months, Inside Higher Ed reported.

Boards must be prepared for the next vacancy not only at the top but in the next tier of senior leadership. At well-run institutions, successful provosts and other senior administrators are almost certain to be offered enticing opportunities for advancement. Ruth Simmons, the just-retired president of Prairie View A&M University, saw her provost and two vice presidents lured away by presidential offers during her five years leading the historically Black state university.

Strategic Issue Number 5

Managing a Welter of Risks

The risks that higher education institutions confront today and will face in the foreseeable future are legion. Many loomed before COVID-19. Some loom even larger now, as has been alluded to above in discussing other top strategic issues.

Strategic planning took a backseat to emergency response during the pandemic. Now presidents and boards need to concentrate again on peering over the horizon and preparing for risks far more foreseeable than the pandemic.

Dark financial clouds hover over higher education and put the business models of many institutions in jeopardy. The ability to increase tuition may be near a breaking point, especially for the private, nonprofit sector that depends so heavily on enrollment revenues. All but the most well-heeled private colleges and universities have well-grounded fears about attracting enough students, as do some regional public universities as student competition intensifies to get into top-tier flagship campuses. Community colleges, despite low prices, are losing ground. Overall public support for higher education has plummeted for a variety of reasons, including misgivings over whether the investment in a diploma pays off (although hard evidence from wages affirms it does).

Brick-and-mortar institutions face emboldened competition from for-profit online providers.

Campus protests, quarrels between faculty and administrators, the mishandling of sexual abuse complaints, and admissions scandals all can damage a college’s hard-earned reputation. So can data readily available now on how many students from each institution fail to graduate, how much debt they incurred, and what they can expect to earn from various majors.

Some universities have been cast in a bad light for lending their name and prestige to online degrees taught not by their own faculty but rather by vendors. Others have been the subject of newspaper exposés for luring students into expensive graduate programs in low-paying fields such as social work or film studies. Such headlines fuel public skepticism about the value of a college education.

College leaders and their boards must be prepared to deal with a multitude of crises and flashpoints, whether smoldering under the radar or sudden, unexpected conflagrations. They must be proactive and have tested response plans in place on how to handle all manner of risk, from natural disasters to self-inflicted wounds. The risks are magnified in these litigious times. In almost every instance in which a prominent university settled sexual abuse lawsuits for hundreds of millions of dollars, senior administrators ignored repeated warning signs and swept complaints under the rug for years. Boards that fail to require that their institution has in place fair and effective policies concerning sexual assault and misconduct are breaching their own legal responsibility and leaving the institution open not only to expensive civil lawsuits but also federal Title IX investigations.

Colleges and universities also remain in the crosshairs of increasingly bold cyber thieves. Some have paid million-dollar ransoms to regain control of their enterprise computer systems and get sensitive data back from hackers. After 26 attacks on campus networks in 2021, at least a dozen occurred in the first four months of 2022 alone, according to the software company Emsisoft. The latest target was Austin Peay State University in Tennessee, which cancelled a day of final exams and sent out an urgent appeal on social media to students, faculty, and staff: “THIS IS NOT A TEST. SHUT DOWN ALL COMPUTERS NOW!”

The financial consequences of inadequate privacy safeguards can be severe. Washington State University (WSU) agreed to pay nearly $5 million after hard drives were stolen from a WSU research center that contained personal information on 1.2 million people, collected over 15 years.

The FBI Cyber Division warns schools to regularly back up and password-protect data; ensure data cannot be modified or deleted from the host system; retain multiple copies of sensitive data in a separate, secure location; install software security updates as soon as they are released; require regular changes of passwords; and use multifactor authentication where possible.

Further practical advice may be found in AGB’s recently released Cyber Risk Oversight for Higher Education Boards: Key Principles and Practical Guidance for Foundation and Institution Board Members, which was developed in cooperation with the Internet Security Alliance. AGB’s bottom-line message: “Without micromanaging the details, boards need to fully understand the standards, controls, and processes that management uses to determine the effectiveness of the institution’s approach to reducing exposure to cyber risk to acceptable levels.”

And it is important to remember that insiders pose serious risks, too. A former finance officer at the Yale University School of Medicine pleaded guilty to stealing $40 million in MacBooks, iPads, and other gear over a decade. She’d been authorized to make purchases up to $10,000 without review and listed the tech equipment as being used for medical studies.

Crisis management expert Simon Barker says that “colleges and universities have never been under as much external scrutiny as they are today, and expectations—and criticism—have never been higher.” Barker, author of Preventing Crisis at Your University: The Playbook for Protecting Your Institution’s Reputation, said boards need to know who at their institution is responsible for reputational risks, how those risks are being managed, and what role the board should play during a crisis.

Barker wrote in late 2021 in Trusteeship, “If there is no budget and no one is responsible, it’s highly likely that the institution’s level of risk is unacceptable.”

Christopher Connell is an independent journalist and former education writer for the Associated Press. He is the author of AGB’s Top Strategic Issues for Boards 2022–2023.