Responding to Today’s Challenges

Is Governance Up to the Task?

By AGB    //    Volume 19,  Number 4   //    July/August 2011
Responding to Today’s Challenges: Is Governance Up to the Task?, July/August 2011

People around the country—students and families, government officials, legislators, public policy experts, and others—are increasingly questioning higher education’s quality, cost, and relevance to the nation’s future. Colleges and universities are also grappling with issues of access, diversity, and student retention and completion.

How can boards be of most value as they sit at the intersection of institutional aspirations and society’s needs? Is higher-education governance up to today’s challenges?

At AGB’s 2011 National Conference on Trusteeship, Ray Suarez, senior correspondent at the PBS NewsHour, led a special panel that examined many of these issues. The following is an excerpt of the discussion.

Suarez: Higher education has come through several years of tremendous competition for students, donors, and other outside sources of income like government research money. How have you managed, and what have you learned? After we’ve set the table that way, I’d like to drill down deeper on the duties of the board through all that time.

Cantor: As competition in all aspects of university life gets fiercer, the need for collaboration gets stronger. That collaboration can take many forms. It may mean that a private institution like Syracuse University becomes an anchor institution in the public revitalization of a whole region. It may mean that colleges and universities start to be more responsible citizens with respect to K–12 schools, or that we in higher education focus less on how selective we are and more on whom we reach—that we take a bigger role in truly educating America. The competition is making us reevaluate.

Woolsey: In some ways, small private institutions like Colorado College have been fortunate in coming through the economic crisis. We had to worry about whether our endowments were going to crash—and some institutions’ did— but we didn’t have the huge alternative investments that were a big problem for larger and richer institutions. Now we are in a place where we can consider important questions like, “How can we use the diversity among institutions to help all of us better understand what we can do to educate people in the next 10 or 15 years? How can we learn from each other?”

Miles: The public universities in Iowa have seen their state appropriations cut 20 percent in the last two years. The budget proposals for this year trim another 7 to 12 percent, so the financial challenges are great. But what’s more interesting to me is the degree of skepticism about higher education and its governance that I sense from every quarter.

A year ago, I met with an advisory council to the College of Liberal Arts and Sciences at the University of Iowa. Two questions were raised that stuck with me. One was, “With the state providing fewer and fewer resources, why does the board of regents even have a say on what public institutions in Iowa do anymore?”

Suarez: It’s a good question, how did you answer it?

Miles: Whether or not the people of Iowa decide to put another nickel into the investment that they’ve already made in state higher-education institutions, they still own them, and we govern them on behalf of Iowans.

The second question was, “You nine regents are appointed by the governor and confirmed by the state senate, but why don’t you all just resign and turn this important job of governance over to the nation’s leading lights in higher education?”And my answer was that the regents work hard, and it’s important to have a connection to citizens of the state. But many people, including those in our state legislature, are skeptical. So the way we go about answering constituents’ questions about governance should be in the forefront of our minds.

Suarez: Mark Yudof, you’ve come through some hellacious years recently. What have you learned from that?

Yudof: We’re in a reset. This coming year, the University of California will receive about 40 percent of the state appropriations it received in 1990, adjusted for inflation. And there are a lot of myths about higher education, but the most predominant one held by board members and presidents is that next year will be better if Senator Smith rather than Jones is in charge of a particular legislative committee. But that isn’t going to happen; next year won’t get better. So we have to ask ourselves, “What are our choices?”

And we need people who look at the whole picture and ask, “If we do this, are we cutting off opportunities somewhere else?” Because we’re almost in a zero-sum game. It’s great to have more graduate students, more scholarships, more outreach into the high schools, more access for low-income students. But if you do that, your student-faculty ratio will go up, or you’ll have fewer mental-health services or less security for your students. There are trade-offs.

Another common myth is that we can cut our way into survival. Institutions are told that we should have more-efficient IT systems or order our pencils in bulk and so forth, but that will not balance the budget. We can mow the grass every two weeks instead of every week. We can wash the windows only once every five years (many of us don’t have good views anyhow). But unless we change the model—offer online or classroom learning in a different way—we will not save the big bucks.

Suarez: Muriel Howard, as you look across the whole country, how have your members managed over the last couple of years? Have some had to contemplate shutting down or cutting back or rebuilding themselves?

Howard: We’ve seen a continuum. A few states are trying to reinvest in higher education, while colleges and universities in other states are facing huge budget reductions. There is no one size that fits all, so it’s going to be important for trustees to look at their own institutions in the context of where they are sitting. All revenue streams for higher education had been deeply punctured; all of them are leaking. It’s a situation that we haven’t seen before in higher education. In the past, an endowment may have gone down, but an institution had other revenue sources that balanced out shortfalls.

Therefore, we’re going to see public institutions trying to collaborate more and be more creative. Meanwhile, they must continue to do the most important thing: provide access to college for the citizens of our country.

Suarez: Access costs money though, especially when everybody is trying to figure out how to do more with less or the same amount.

Howard: We’re going to have to think about how to restructure. Where are our resources coming from? Where can we gain new resources? Also, it’s our responsibility as highereducation leaders to push the states and the federal government to consider ways to help us restructure. As part of that, we will have to figure out not only where we want more state support but also what we must give up.

We don’t want to end up in a situation where we have masses of unprepared people, unable to take jobs produced by the new knowledge economy. We all have to go back and review our institutional costs. How should we rethink our curricula? How can we best deliver instruction? I know faculty members are concerned about what some of the answers might be to those questions. But for now, everything has to be on the table for review and discussion.

Suarez: Faculty members are certainly concerned because some are afraid that budgets are going to be balanced on their backs—that any cost savings will be the result of fewer teachers teaching more students—or that more faculty members will be pushed into part-time status.

Howard: Faculty members are worried about those things. And if we, say, challenge the model of faculty having tenure, we need to have a good answer as to how we’re going to be able to develop new knowledge. Tenure heavily contributes to the flexibility and freedom that faculty need to remain engaged in such work. I’m not concerned about how we distribute the knowledge and information that we have. I worry about how we are going to create new knowledge.

And unfortunately, I don’t think there’s a silver bullet. It’s going to take a lot of rethinking and recalibrating to work our way through this situation.

Suarez: Where do the boards come in, in trying to solve these problems?

Woolsey: The main role for the board, besides its fiduciary responsibility, is to interpret the big societal questions to its particular institution. If you’re working very hard educating students and doing research 24 hours a day, you don’t have a lot of time to think about such issues. The board can bring a broader perspective.

Miles: Boards need to do two things: one that faces outward, and another that faces inward. Facing outward, if we want continued support, we must make the case that higher education has never been more essential, given America’s need to keep up with the rest of the world in the knowledge economy. Facing inward, we earn respect with our various constituencies if no one is asking harder questions of our institutions than we are. If people sense that we board members are simply defending our institutions, then we lose credibility and won’t succeed.

Cantor: Colleges can’t be ivory towers anymore and survive. The board serves the purpose of translating the world for academe. At Syracuse, we talk about our board as a community of experts. Our trustees are geographically dispersed and represent the different communities that we want to have an anchor in. They make connections—to community colleges, industry partners, and many others—about significant national and local issues.

Suarez: Are the challenges such that, looking forward, you may have to think seriously about the way people become board members? What mix of skills and backgrounds do you want on a board?

Howard: We should go back and take a look at governing boards of public institutions because, as an institution changes, its needs are going to be different. And often, those politically appointed trustees are not taking those needs into account. Minnesota has a system with a nominating board that looks at the needs of the institution at a particular time and brings trustees to the board to match those needs. In the future, it will be important to move towards more of a hybrid model along these lines.

Cantor: Our board needs a mix of people who not only provide traditional philanthropic support but also have expertise in the different sectors where we do research—environmental engineering, the financial sector, and many other areas. We also all need people from different geographic communities, because the footprint is changing both for public institutions going out of state as well as for private institutions.

We’re an institution that’s recruited heavily in the northeast, but we’re now spreading our wings—building on our base in the west and southeast, for example. We need trustees who really have that sense of geographic breadth and expanse. We need people with both the traditional sense of loyalty to the institution and a forward-looking sense of what the world out there is doing. How can we bring Syracuse to the world and the world to Syracuse?

Suarez: I recently interviewed the president of the University of Michigan in Ann Arbor, and I was shocked by what a relatively tiny portion of its overall budget comes from state funds. Why shouldn’t public institutions say to legislators in Madison, Springfield, or Albany, “You asked us to go out and become less reliant on government support and we did. Why not give us more freedom so we can survive and accomplish our institutional missions?”

Cantor: When I was provost at the University of Michigan the argument was constantly made that, with smaller appropriations, we should have more freedom from the state. But while state support may be a small part of an institution’s operating budget, you would need to raise an enormous endowment to replace it. We shouldn’t take even a small slice of state support for granted.

Also, it’s our responsibility in higher education to educate legislators and other state officials about our role. For example, the University of Michigan is contributing to the revitalization of the state economy through innovation, and university officials there are able to talk to legislators about that.

Yudof: Look, many of the states are dead broke. They have to support pensions, Medicare, the pharmaceutical initiative of the Bush administration, the health-care initiative of the Obama administration. It’s not that state legislators don’t like public higher education. You’re just seeing the priorities of an aging population.

Also, while state officials say that they want economic growth—that they want to be the next Silicon Valley—the connection somehow gets lost between the type of innovation that universities at their best can provide and the resources required to support it.

Woolsey: I’ve spent a decade running a consulting practice for colleges and universities, and one thing that has struck me is that every state has its own unique system of higher education. So the idea of being able to start a national movement to change the role of regents vis-à-vis their state systems is unlikely. It would be a long uphill slog. Instead, we should do what Nancy said, which is to get people focused on what the needs are and find board members who can help meet those needs—as opposed to just having board service be a political plum.

Miles: Rather than frame the debate in terms of the annual allocation to higher-education institutions in the state, the conversation should be about what we want these institutions to accomplish for the state. If we can have that conversation, then the board and top institutional administrators can go forward in a constructive way. Otherwise, a particular item may catch someone’s attention on a given day that may be miniscule in terms of the mission of the institution, its vision, or its budget. What we need is more conversation around the major topics.

Suarez: As we look ahead, we see smaller high-school graduating classes with a different racial and ethnic mix. Many more kids will be the first person in their families to go to college—and in many states that will be a new experience. What was once an East Coast/West Coast phenomenon is now an everywhere phenomenon. When, in just one decade, the Latino population doubles in both Virginia and North Carolina, that’s remarkable. How can institutions manage both a decline in the number of students and the need to serve more students who are sometimes the toughest to reach, recruit, support, and educate?

Yudof: We can do a lot. We can provide access. We can take care of low-income students as well as we can. But it’s disgraceful in this country that we are hearing all this talk about cutting back support for universities at the very time many people who have historically been left behind are coming along and needing higher education. It’s disgraceful.

We need to focus on low-income students and students of color, particularly the Latino population. More than half of all California children are Hispanic, and the future of California is the future of the Latino population. They’re hand in glove. If one fails, the other will fail.

Howard: A number of colleges have decided to work intensely with K–12 schools so that those youngsters will require less special support and fewer resources when they come to college. There has to be a national movement to support K–12, whether it’s working together on common standards or each institution developing its own core program standards.

Suarez: How is it different for private selective institutions?

Cantor: Private selective institutions have not fully grasped our responsibility—we have not stepped forward fully to think about the changing socioeconomic demographics. So often when we talk about students who are eligible for Pell Grants, for example, we talk about the University of California at Berkeley or Los Angeles, not private selective institutions. At Syracuse, I’m proud to say, 29 percent of our entering freshmen are Pell-eligible and a substantial number are the first generation to go to college. We have a strong relationship with the Syracuse City School District to create opportunity and close achievement gaps.

Woolsey: Selective institutions have done quite a good job of plucking off the best minority students that they can find and populating their classes with very talented kids who are going to be leaders in the country. The problem is that there’s huge competition among institutions for those kids, while we don’t have an adequate mechanism for focusing on needy students in the more normal range. The focus is not on getting more minorities in college but on winning the cross-admit battle: Will a student we accepted go to Massachusetts Institute of Technology or come to us?

Cantor: Yes, we should identify and support a broader range of potentially qualified students, many of whom will turn out to be very talented, and not just pick off those that already seem to be the cream of the crop.

Miles: In Iowa, we are entering a period of declining highschool graduation rates. We also are seeing a changing mix of students. Fewer students are coming out of high school fully prepared for their college experience. It’s going to be a more expensive proposition, and it will test our values. Every dollar that you move from merit-based aid to need-based aid is a dollar that influences your student body, your U.S. News & World Report rankings, and how you are perceived in the marketplace.

But there’s a group of perfectly qualified students who may not raise an institution’s overall profile but who need our help. Judgments are being made every day that will affect whether the opportunities that have been available to many of us will be available to the next generation of students. It’s difficult to say in a time of declining resources and concern over the quality of colleges and universities whether higher education will make the investment that’s needed.

Suarez: In recent years, I’ve seen a change in how people view remediation—even in places like the City University of New York, where it has been understood to be part of the assignment. There’s this get-tough attitude, an almost hazing kind of talk about it.

Yudof: Community colleges are a logical place to do remediation. You can get remediation, spend two years there, and then transfer to a University of California campus. It’s a new start.

But I must say that the studies of remedial courses are not encouraging. There’s a fair amount of evidence that we in higher education don’t know how to do this. Some studies show no return on the investment in remediation; others show only modest returns. Maybe it’s a question of scaling up; there always are isolated success stories of kids who do remarkably well. But we have a road to travel to be more effective in supporting these young people.

Howard: We shouldn’t forget that our historically black institutions do a great job. They graduate most of the students of color that are coming out of college. Similarly, some of our Hispanic-serving institutions have figured out how to move those students through the pipeline. They have more experience than some of our more-traditional institutions. Nancy started out talking about collaboration, and there will have to be some collaboration among different types of institutions if we’re going to serve these students well.

Also, often students of color don’t attend college because they lack awareness of how to obtain the financial aid they need. So it’s not just about getting into college. A number of things must happen for these students to have access to higher education. That’s why our partnership with the K–12 community is crucial. But, like anything else, our task is doable if we focus on it. When we ask the right questions, we will begin to get the right answers.

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