Why Boards Shouldn’t Be Spectators for Athletics

By AGB    //    Volume 26,  Number 4   //    September/October 2018

Frequent scandals in college sports are exposing alarming lapses in board fiduciary responsibility when it comes to the appropriate role of athletics on campus. Last April, four higher education leaders— two trustees and two presidents who are veterans of key NCAA committees—came together during AGB’s National Conference on Trusteeship for a frank conversation about student-athletes, presidents, and governing boards. Excerpts from the discussion follow.

Richard D. Legon: A lot of the coverage related to college sports today is Division I-focused, but the issues we’ll be talking about today factor into Divisions II and III athletics programs—how they’re perceived, how they’re overseen—as well as issues related to business models, academic progress, and student-athlete health issues. They cut across divisions.

We’re also watching above-the-fold issues related to college sports from recent high-profile scandals, mostly in basketball this time around—ethical violations, sexual misconduct, and questions about the NCAA. What’s its role? What has been its role? What will or should be its role going forward? And we are all waiting with baited breath for the report of the NCAA Commission on College Basketball [issued on April 25, 2018], chaired by Condoleezza Rice.

So, when you talk to a member of the public who may have season tickets to your sports, there is always the statement that, yes, athletics are great here, but … And there is that heightened public skepticism about our sports programs and how we conduct them, how we oversee them. Then there are many institutions that look to college sports as a front door or a branding process that facilitates enrollment and fundraising and really adds value. So how do we calibrate? How do we balance all of that?

Carol, let me begin with you. As I indicated, you’ve been involved in these debates [at your own institutions] and nationally for many years. Help us set the context to get this conversation going as it relates to boards and trustees regardless of division. Where are we?

Carol Cartwright: Great way to get started, focusing on board governance. Boards have a fiduciary duty to oversee intercollegiate athletics. The fiduciary duty extends to all aspects of the institution. So athletics clearly falls within that duty. And with respect to the duty of care in particular, I think it’s important that boards become informed about the national context, as well as the facts of their own institutions’ competitive level and practices. They need to be sure they understand the facts, but also understand the perfectly awful myth and perceptions floating around college athletics today. So get educated, have the kind of dialogue that’s required under the duty of care, and be willing, as you work with your president, to set the guidelines and the parameters under which your intercollegiate athletics programs are going to operate.

You have to be willing to say no. There has to be a framework so that as you delegate to the president, and he in turn delegates to others in the institution, they know where the lines of play are and within which goalposts they’re playing. Fiduciary duty of care is first and foremost.

Legon: What do we say to presidents about the fact that we can’t allow boards to duck and cover on this?

Cartwright: Presidents work for boards, don’t they? That’s the fact of the matter. So it’s a partnership. The president and the board need to work this out. But clearly the board is delegating the entire operation of the institution to the president, and that includes intercollegiate athletics. One of the problems is that in many places, intercollegiate athletics runs on the side. It’s got to be integrated into the normal practices of the institution. How do you build budget for academic programs? That’s how you build budget for intercollegiate athletics programs. How do you oversee success in academic programs and student learning outcomes? That’s how you have to oversee success in intercollegiate athletics.

Legon: Rod, you, too, have touched this at the highest levels, and you’ve been an NCAA leader at the president’s level. Are boards doing what they need to do in terms of their own accountability or fiduciary authority when it comes to this subject? Can they, should they do more?

Rod McDavis: I think there is probably a divide right across the nation, and that is to say I think some boards get it. I think some boards understand they have a responsibility to oversee what happens in intercollegiate athletics. And so, from a policy perspective, they’ve already put in place some policies that are helpful to guide the president, the athletics director, and the others within the university who are significantly responsible for making sure that intercollegiate athletics does the right things. But I think there are other boards that, to Carol’s point, have simply given that responsibility to the president and don’t even ask for reports. They don’t talk to the president about it. They don’t talk to the athletics director about it. This is not part of what the board functioning is all about, and I think they have to come to the point where they accept this as a responsibility. Right now, they’re not really taking that on.

Legon: Richard, your student-athletes compete in Division II. Does what Carol and Ron just shared resonate in the storyline of how you and your colleagues on the Hawaii Pacific board oversee this?

Richard Hunter: It most certainly does. But I would say that if our board is typical about this—and I believe it probably is—we give relatively little time to talking about athletics and relatively little focus to the risks that emanate from our athletics program. If it were not for our president bringing this to the board recently and saying, “I want you to focus on this, and there are some significant issues here that we need to protect, that need action to protect the institution, our students,” and so on, I don’t think we would have given it the attention that we have in recent months. As a trustee I believe we all feel that the attention we have given [athletics] is well due and we have been able to take some actions that have been reassuring on the one hand and protective on the other.

Legon: Rod, how do boards own their agenda broadly but also as it relates to this? Accountability is a high-profile area. McDavis: I think it is back to what Carol said. This is a partnership, and intercollegiate athletics ought to be part of the orientation to become a board member. So if the board is well-oriented to its scope within the institution, then intercollegiate athletics ought to be part of that conversation at the outset of the tenure of a new board member, and it ought to be integral to what the board is focused on during the course of the year. There ought to be some way to inform the board. And at some board meetings, maybe more than one, there ought to be some conversations about what’s happening in intercollegiate athletics. [And board members] have to assume that as a big area of responsibility and be sure they are asking the right questions about what’s happening.

Cartwright: And let’s not forget the role of board committees because boards do get their work done through committees, and in some way intercollegiate athletics oversight ought to be assigned to one of the committees. So that committee should be working out an annual work plan and an agenda for the year, and the chair of the board ought to understand what is likely to flow through from a committee. Now the danger is that some committees can devolve into booster groups. You have to really guard against that because there is a fan element but there also has to be a fiduciary element.

Legon: Ross, you have that athletics needs to be part of the institution’s overall strategic direction—strategic plan perhaps—that the board ultimately owns. Assuming that, does it heighten the potential for board accountability for this issue? Or does it perhaps mute it a little bit because it’s part of a bigger thing?

Ross Mugler: No, I think it raises the profile. What I’m finding from talking to a lot of people here is that there’s really not a lot of opportunity for engagement of board members. Having a strategic plan for athletics gives you an opportunity to really focus on all the important aspects of it: academic excellence, competitiveness, funding, student welfare. Not only do we have a strategic plan, but we also have regular updates of the strategic plan during the athletics committee meetings.

Legon: Carol, how does the public’s perception about how we push athletes to safe harbor on academic programs feed the narrative? How does that have to be adjusted? And is it squarely just a Division I issue?

Cartwright: It’s definitely not just a Division I issue. Those kinds of problems exist at all levels. I serve on the NCAA Committee on Infractions [for Division I]. But I also see the agendas for the other divisions. These issues are across all divisions, [but] not at the high-profile level that we typically see in Division I. So the public perception is significant. Mark Emmert, the president of the NCAA, recently reported publicly that 79 percent of the public in the association’s survey thought [the situation] was out of control, and 50 percent thought that the NCAA could not manage the change that was necessary. I think the real test is coming [from] the Rice Commission report. The extent to which the NCAA membership takes [the commission] seriously is going to be a real test of whether the NCAA can be a part of the change process or a part of the problem.

One of the things I hope the [Rice Commission] will recommend is independent directors. If there were more independent voices that spoke to the good of the enterprise, I think we would see more faith in what the NCAA could do—and see more change.

Mugler: I think it’s really critical that as board members we encourage our college presidents to get involved at the NCAA level and at the conference level. This has paid huge dividends for us at Old Dominion. It has given us a different look at athletics.

Legon: Richard, you [have] talked about the culture assessment that was done at your place, looking at the health and welfare of your student-athletes. In brief, what brought you and your colleagues to do that? Was it the board? Did you have any engagement with it at that level? What did you learn?

Hunter: We had discussions at the board level and with our president and senior administrators on the whole question of the risks that come out of our athletics program, and we talked about how we have training, we have policies, we have all of those good things. But in the end, when you really think about it, it’s the culture not only within the athletics program but also within the whole university that dictates the level of risk that you are exposed to.

We decided to bring in an outside firm to audit the culture within our athletics program and indeed within our campus. It was a very, very interesting exercise. The firm sent four top-quality people to visit us [for two days]. Prior to visiting, they received a lot of documentation. They interviewed faculty. They interviewed coaches. They interviewed students. They interviewed administrators. They interviewed a lot of people. They worked very hard. At the end of [the process], they sat down with us and basically said, “Look, you’re not in a bad position. Your culture is reasonably healthy. But we’ve got a number of suggestions that we would like you to consider.” And they gave us a list of recommendations having to do with our policies and training and that sort of thing.

Perhaps it was reassuring, but I also think it sent a message around the university that the board members were concerned about these issues, that we were prepared to spend significant [sums of ] money on making sure … that the culture was in good health.

Legon: Ross, in Virginia, you did something with the speaker of the House of Delegates, Kirk Cox, that I think was really cutting edge. Cox put forward a piece of legislation to control the increased student fees that we’ve seen a lot of institutions charge to help support intercollegiate athletics programs. Virginia has done something fresh and new. Tell us about that briefly.

Mugler: In 2013, the joint audit agency of the Virginia General Assembly issued a financial report for the previous fiscal year. It must have been a 60-page document. We had schools in the commonwealth with student fees that ranged from $400 to $2,000. On average, [the fees were] 12 percent of tuition. This really was upsetting.

In my institution, we had founded the current football program in 2009. Seventy percent of our student fees were going to support athletics. Kirk Cox—who at the time was the House majority leader—was really horrified by the findings of the report, and all the schools in Virginia had to roll back the student fees going to athletics to 55 percent or less by the year 2020. It was a daunting report. My school has already complied. We are under 55 percent already before the 2020 [deadline]. So we looked long and hard at those numbers.

Legon: Rod, let’s go back to some of the high-profile issues. How do we deal with questions of conference play, coaches’ contracts, and the media feeding frenzy? How do we get hold of this, and what do folks on boards, as part of their accountability, have to do?

McDavis: I think it comes down to a question of balance. Within the university there’s got to be a sense of balance between everything else you’re doing and what you’re doing within intercollegiate athletics. So, for an example, if the primary focus of the university ought to be on graduating its students or on student success, then that ought to spread across the entire university. If that’s not occurring in intercollegiate athletics, then there’s a focal point. There’s a place where the board can step up and say, you know, we want you to spend more time focusing on student success.

You mentioned coaches’ salaries. That’s a huge issue, and I think we have to rein those in. I think coaches’ salaries are getting out of control. But in that context, I think what we have to look at is the market. You look at some of the programs that consistently win every year and what they pay their coaches, but then you also look at the other side of that in terms of what those programs contribute to the overall image of those universities and the value of that. So there’s a balance in there somewhere that we have to search for.

Legon: Carol, should boards know about the coaches’ contracts?

Cartwright: Absolutely, they need to know. I go back to the point that I made with your very first question. The board needs to set the guidelines in terms of what’s acceptable within [its] mission, value proposition, and resources.

The higher ed business model is based on cross subsidies throughout the institution. So we need to understand that the subsidies were there not just for athletics but for other programs as well. But what’s the right range? That’s a board responsibility, that tone at the top coming from the board and the president. The two working in partnership is absolutely essential.

Hunter: Can I just add a point? I think that the board’s role, if you like, is a balancing role. The board is there to ensure the longterm sustainability, success, and growth of the university within the mission that it has. Anything that affects that, the board has got to be prepared to play that balancing role with [it]. If things are out of control, bad things are happening, that’s where the board needs to step in. But as a general framework, the board has to make very clear to the president and to everybody else in the university what standards it expects and what the parameters are.

Legon: Rod, you led the committee on academic progress and I think great strides were made during your tenure, under your leadership. In the revenue sports, can we really get there? Can we make some progress and develop these athletes into successful students? And who holds accountability for the integrity of the academic mission?

McDavis: Yes, I think we can and we are. If you look at the academic progress over the last 10 or 15 years, you will see a significant increase in the revenue sports, specifically football and basketball. I think what happened there is that we set the standard. We said this is what you have to achieve—not what you ought to or what you might or what you should achieve—if you’re going to keep your program in good standing. So once you set the standard, then I think the boards, the presidents, the ADs, and the coaches will adhere to [it]. So we just need to keep plowing ahead and saying, well, maybe it’s time to look at it again.

Legon: Ross, regional accreditors are especially looking at boards and governance when they come for an institution team visit. Some of them are really drilling into what the board is doing, how it is structured, and how it is engaged. Should the accreditors look in some way at how boards deal with this issue?

Mugler: I think [the process] is fair, but how you deal with it is regular reporting on all the things we’ve talked about today.

Legon: But should accreditors specifically, when it comes to Old Dominion, visit with you and your colleagues and talk about what you’ve been sharing about the board’s accountability for sports?

Mugler: Yes. And they don’t. I’ve been on the board for 13 years, and I haven’t met with one of them.

Legon: Should we lean on accreditors to do that?

Mugler: Yes.

Hunter: I agree. We had accreditors at the university a couple of years ago, and, as far as I know, there was relatively little effort put into the whole question of athletics and zero [effort] into the board’s role vis-à-vis athletics.

Legon: And should there be?

Hunter: Yes. I think there absolutely should be.

Legon: Before all of you leave, we have enough time for quick takeaways for all our good colleagues here. What’s the one thing you really want them to go home with when it comes to intercollegiate sports?

McDavis: Speak up. Pay attention. Be involved and support the folks who are trying to make the correct changes in intercollegiate athletics.

Mugler: Protect your student-athletes.

Hunter: Balance is a board responsibility. You’ve got to earn it.

Cartwright: Take responsibility for keeping the college in college sports.

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