Corporate executives sit on our governing boards, hire our students, consult with our faculty members, and lecture on our campuses. Industry leaders champion our capital campaigns, support our initiatives, and guide with their expertise. It’s a productive and rewarding relationship that has been mutually beneficial for higher education and the business domain.
That’s why it should come as no surprise that higher-education leaders are occasionally invited to serve on corporate boards. A recent AGB survey shows that about one-third of chief executives serve on a board of a for-profit corporation; of that group, 14 percent served on two or more corporate boards. Yet observers sometimes raise questions about the propriety of this type of service. As a president who has served not only on many nonprofit boards, but also on three corporate boards, I would like to share a few insights about the corporateboard experience.
First, the benefits:
• Board service can provide important networking opportunities. I have made professional connections that have benefitted our students and faculty members directly through research opportunities, internships, job placements, and philanthropy.
• Managing an academic institution isn’t the same as running a corporation, but through service on a bank board, I have learned much about finance, investment strategy, risk, and audit. This expertise has helped me become a more informed university president.
• Whether you work in government, industry, or academe, getting out of the confines of your own environment is vital for professional development, especially if you’ve had a long tenure in one place. Corporate boards provide interactions and experiences that enhance professional growth.
• Higher-education chief executives bring independent voices and fresh insights to board service, and academic leaders are a trusted source of information related to workforce training, innovative research, and social change. Such expertise benefits the corporation and thus our economy.
There are caveats of course, and these must also be carefully considered. For example, there have been instances when board members—including university presidents—have been party to a failed endeavor and even named in lawsuits against a company. University presidents must be very sensitive to reputational risk. In addition, any appearance of conflicts of interest, especially when they revolve around financial issues or compensation, must be avoided.
A president’s governing board, along with the general counsel of the corporation and the university, can be helpful in thinking through the checks and balances that might be appropriate when potential conflicts arise. Presidential contracts often have a provision specifying the need for board approval. At the very least, it would be good practice for a president to seek the approval of his or her governing board chair before accepting an offer to serve on a corporate board.
Critics are often quick to disparage presidents for the compensation they receive for board service. But according to the recent AGB survey, more than three-quarters of presidents receive less than $50,000 for such service.
Presidents should also avoid being overcommitted, especially early in their tenures. Concentrated time should be spent at one’s home institution, and excessive corporate board service can be a distraction. It’s crucial to determine if the corporate board schedule is compatible with your institution’s schedule. Most boards meet at regular intervals, but that’s not always the case. Location and travel logistics may also help determine whether it’s feasible to serve on a particular board.
Personal experience leads me to believe that many presidents would enjoy the opportunity of serving on a corporate board but don’t know how to enter this world. Governing board members can be instrumental in this regard, and they can provide wise counsel and encouragement. They can also make introductions and help presidents establish connections that can lead to such invitations.When the right circumstances are found, the result can be a uniquely fulfilling experience for the president, institution, and corporation.
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