HESA

Higher Education Strategy Associates

Boards, Senates, and Myths of University Exceptionalism

If there is one thing that the departure of Arvind Gupta has demonstrated, it’s that there are a large number of faculty (and others) who either misunderstand or dispute the role of Boards of Governors at universities.

Here’s the deal.  Regardless of whether an organization is for-profit or not-for-profit, there is some kind of committee at the top, which usually has the word “Board” in its title – Board of Trustees, Board of Governors, whatever.  The job of this board is threefold: first, make sure the organization meets its strategic goals. Second, make sure it meets its financial goals (in for-profits, these two are pretty much identical, but in non-profits they’re different).  Third, hire and hold accountable a chief executive for getting those things done.

At this point, I hear the objections: “universities aren’t corporations, how dare you compare us to a for-profit company, etc.”  The first of these is wrong: universities most definitely are corporations.  Corporate status is key to providing the legal framework for pretty much everything universities do.  True, they aren’t for-profit entities (in our country, anyway) but for-profit/not-for-profit is irrelevant with respect to governance: you still need a body at the top of the organizational hierarchy performing those three functions.

What makes universities unique is the degree to which staff are involved in developing  strategic goals.  Both for statutory and practical reasons, this job is more or less left to Senates (or their equivalents), and their committees.  Boards formally ratify these strategy documents, and thus “own” them, but compared to other types of organizations, they are very hands-off about this part of the job.  Senates, in effect, are the source of university exceptionalism.  But there is nothing – literally nothing – that makes universities exceptional with respect to the jobs of maintaining healthy finances, and selection/oversight of the chief executive.  The Board of a university executes those functions exactly the way the board of any other organization does.

When it comes to hiring, people kind of get this.  When new Presidents are hired, no one questions the prerogative of the Board to make the decision.  And while there is sometimes grumbling about who got chosen or who didn’t get chosen, no one parades around demanding “transparency” about why candidate X got picked instead of candidate Y.  But apparently when a President leaves, many people think that the Board owes the faculty all the gory details.  Because transparency.  Because “universities are different”.

Transparency is usually to the good, of course.  But sometimes, if you’re dealing with a personnel matter, the correct way to deal with it is to say goodbye as quickly and as amicably as possible.  By and large, you don’t do that by broadcasting the circumstances of the departure to the world.  Transparency sometimes comes second to expediency, tact, and judgement.  Yet, what a lot of people at UBC seem to be saying is that Boards owe them explanations.  Because “universities are different”.

To keep this short: universities are different – but not in that way.  Regardless of the organization they serve, boards don’t owe anybody explanations about personnel decisions.  They have a responsibility to make sure the organization is fulfilling its mandate (in managerial terms: making sure it has a strategic plan, and is fulfilling it), and providing a public good.  That’s it.   What they have to make clear in a university context is whether or not a dismissal/resignation affects the strategic plan, or (especially) if there was a dispute between Board and CEO regarding the nature or direction of the strategic plan.  And the reason they have an obligation in this scenario is because of Senate’s role in creating the strategy in the first place.

Sure, faculty might want to know details.  They’re curious.  They’d like to know (or impute) the politics of the whole thing.  But there is no right to know, and saying “universities are different” – when in this respect they clearly are not – doesn’t change anything.

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11 Responses to Boards, Senates, and Myths of University Exceptionalism

  1. david.devidi@uwaterloo.ca says:

    I’m not sure how universal this is, but the hiring process for the so-called “chief executive” at many universities, including Waterloo where I work, is governed by an internal policy. The committee that makes the choice includes several members of the Board, but is more than half faculty members. After that both Senate and the Board have to ratify the choice. It is written into the policy at Waterloo, at least that the President must maintain the confidence of faculty, and there are processes that can be initiated for failure to do so. So I think “literally no difference” in hiring and oversight of the President’s performance is an overstatement.

  2. Paul Sadler says:

    In addition to David’s “exception” above, I think there is another one. For-profit boards are, in theory at least, accountable to shareholders. If the board was to suddenly oust a CEO, particularly with large buyout packages, a shareholder doesn’t need all the details but they do need enough transparency to assess if the board was wielding power with integrity.

    With non-profits, the accountability of the board is a bit more diffuse by sector. Charities are accountable to their donors and Revenue Canada, and even to their intended recipients (depending on jurisdiction). Hospitals are highly accountable to government through funding checks and balances, as well as medical regulatory bodies and societies within provinces. Other sectors vary too but usually it’s a combination of who provides “licensing” that allows them to operate and who provides funding.

    For colleges and universities, the licensing feature is relatively weak as no one would be happy if the government tried to look into the personnel decisions of a university board, far too “meddlesome”. Similarly, on the funding side, you have either government (still want to avoid interference), donors (who may sway some boards but probably not hold them accountable when they fire someone), industry (for faculty decisions perhaps or research direction, but probably not Presidents), or students (who pay tuition). None of these are forces for the Board to reckon with.

    However, on behalf of the minions who actually have to produce the company’s product, and whether in the guise of simply “we work here, we care” or “we’re unionized, and this has a pretty significant impact on our work environment, reputation as an institution, etc.”, faculties are in a unique position of being both “management” and “front line service providers”. To that extent, I think boards do owe an appropriate level of transparency about the decision they made and how it contributes to achieving the strategic goals, as you said.

    Maybe not all the gory details coming out of some universities when labour relations go south, but a honest, hopefully candid, explanation that provides sufficient closure. One that allows them to grumble about the choice or the decision, but not whether the board had a legitimate rationale. Otherwise, “management” and the “student body” are left wondering WTF? and boards lose the legitimacy of governing anything.

    P.

  3. My UBC says:

    The question is not if what the board did was legal, the question was it the right thing to do – i.e. was it the best decision in terms of the consequences for UBC.

    All the signs so far, sadly, seem to indicate it was not. For starters the way the ‘resignation’ announcement and its aftermath had been handled were a PR disaster. The actions of Montalbano were a show of arrogant incompetence, starting from his comment that ‘the university won’t miss a beat’, through the phone call to Berdahl, the likely calls to Buisness School administrators (which he does not deny), and his going on to give interviews on the events wearing the BoG chair hat.

    Moreover, from the information leaked so far there seem to be only two viable explanations for’ the ‘resignation’:

    One is that he didn’t get along with senior administrators/BoG members. While I can understand personal interactions are important, these people are grownups. ‘Hurt feelings’ are not a sufficient reason for flushing a million dollars down the drain and making UBC the ‘academic story of the year’ for the wrong reasons. Moreover, a whole lot of people, e.g. members of the President’s Advisory Committee, repeatedly commented on how pleasant it was to work with Gupta. So how likely was he to be the one to ‘badly hurt the feelings of others’?

    The second is that he was refocusing the university “too much” toward its core academic mission of teaching and research. If this was the reason then from where I sit he was the one promoting the best interests of UBC and the BoG or whoever forced him to resign was acting contrary to that interest. These people should not and cannot remain at UBC. If this option is even a remote possibility, this situation requires external intervention and investigation.

    Note that the ‘personal reasons’ , which was originally considered by many causing people to wait and tiptoe around the situation, is really no longer a viable version, given all the personal friends/contact of Gupta who rallied against UBC’s decision. See .e.g. the op-ed from Bill Petersen http://ubyssey.ca/opinion/letter-board-handled-guptas-resignation-abysmally014/. These people would not be out there if the choice to resign was due to personal reasons.

    Bottom line, while a BoG can legally force a president to resign, there better be very good reason to do it effective retroactively/immediately (the Globe & Mail minor scoop) and do it just one year into a term. For now all the reasons floating around do not justify such an extreme decision by a mile.

  4. Sean Lawrence says:

    A few notes:

    1. Universities aren’t corporations. The university act of British Columbia specifically excludes the university from incorporation. They are “corporate bodies” but they aren’t governed by the same legislation as corporations, nor should they be. Indeed, the university as an institution traces itself to the University of Bologna, in existence since at least 1088, whereas the first joint-stock corporation only came about in about 1250 (and one might question whether it should be considered a corporation at all). The first chartered company (i.e., one with clear legal status) doesn’t come about in England until the mid-1500s. One might as well say that a university is an army for it, too, has something called a strategy, or a church, because it pursues truth.

    2. Secondly, the supreme authority in the university is, in theory, Convocation, not the board. I can’t imagine a corporation having anything quite the same (stockholders? Lloyd’s names?). It’s odd that you don’t mention it. In fact, the dons of Oxford managed to arrange a vote of their Convocation, overturning a decision of the board, and ruining their chancellor’s life’s work. I’m surprised that nobody has suggested anything similar for UBC.

    3. Your entire argument — and, to be fair, that to which you respond — fails to separate is and ought. The university is, indeed, run by a board, in which political appointees command an insuperable majority. Whether it should be — whether they are competent to judge the work of academics, whether the situation of a university is so fundamentally different from their experience as to reduce them to ignorant amateurs, whether they should be accountable only to God — is another question entirely. The powers of the board of governors is a matter of fact and of law, but it cannot serve as its own justification.

    4. You may wish to look at this article, which points out that the Board of UBC is exceptional, indeed. Most other universities have a much more diverse board, whose members draw their authority from some more relevant grounds than political appointment: http://www.castanet.net/news/Commentary/146637/Far-reaching-tentacles

    Yours,

    Sean.

    • Alex Usher says:

      Hi Sean.

      1. From UBC’s legal counsel’s FAQ’s: “UBC has been a corporate entity continuously since 1908, which is the year in which the original legislation creating UBC was enacted. Unlike a regular corporation created under the Business Corporations Act, there is no registration number for UBC. If someone is inquiring into the University’s corporate status you may state that The University of British Columbia is a corporation continued under the University Act, R.S.B.C. 1996, c.468.”

      2. Does convocation work the same way at UBC as it does at Oxbridge? I’ve never heard of it doing so at a Canadian uni but that could just be my ignorance.

      4. It’s absolutely true that UBC’s Board (and I would assume those of BC boards in general) are much more tied to govt. than elsewhere and that has some (IMHO) usually negative effects. Separately, there is an issue about how Boards are composed (diversity of backgrounds, diversity of experience) as well as level of knowledge (they are there to support an institution in its mission – how well do they understand either?). I’d add: the same is definitely true of uni search cttees: how many of them ever include anyone who;s ever been a university President? How do they know what they are looking for? Etc. So I’d agree with you that there is a story here – perhaps I’ll return to it soon.

      • Sean Lawrence says:

        1. Well, the shills for the corporate types on the board would say that, wouldn’t they? Besides, this definition of a corporation as any “corporate body” could be extended to cover churches and even unions, which is clearly absurd. More to the point, should universities be corporations? Should they think of themselves as corporations? Should we challenge them when they do? Leads me to point three, above.

        2. No, I don’t know of any Canadian institution that does follow the Oxbridge (really just the Oxford) model of using convocation, though the University of King’s College might come close in some ways. More to the point, it’s part of the legal status of many Canadian institutions, so if we’re discussing legal statuses, as your argument about the roles of boards does, then it should clearly be referenced.

  5. Yaacov Iland says:

    The conclusion of this article, that the board does not owe and, in fact, cannot provide an explanation of why Gupta was fired is correct, as is the portion of the argument that says that universities are not different than corporations in this sitution. However, the argument that the similarity to corporations is due to the nature of the UBC board is incorrect. The real reason has nothing to do with the role of the board and everything to do with canadian employment and libel law. Were the board to give an explanation for Gupta’s departure that revealed personal information, such as a health or family problem, they would be in breach of employment law around the privacy of employees. Were they to give an explanation that suggested Gupta has caused some kind of problem, but not enough of one to dismiss him with cause, they would be at risk in a libel and/or wrongful dismissal suit. As a result, even in cases that do not fall into either of these categories, employers, including universities, typically do not comment when an employee leaves, unless they were terminated with cause for something that is already in the public eye, as was the case of Shawn Simoes at Hydro One.

  6. Pingback: UBC, WTF? | Whiteboard Workout

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