Morning all.  This is the final blog of 2022: service resumes January 9^th. 

When I do a send-off blog, it’s worth thinking about the year past and asking: what should we remember about this year and what do we expect from the year ahead?

To my mind, there are really two big stories from 2022.  The first has to do with Laurentian University, which was still the scene of considerable intrigue as evidence gradually mounted that its then-President, Robert Haché, had viable options other than CCAA that were never seriously investigated or considered.  If the story was simply one of government underfunding and lack of oversight, presumably Laurentian wouldn’t be the only victim out there.  Therefore, this is pretty clearly an issue of governance and in particular whether “independent” Board governors actually understand their institutions’ affairs – which can be quite complex – well enough to actually properly oversee them or they end up rubber-stamping administration decisions.  It is, basically, a principal-agent problem that needs to be considered far more carefully that it has been at other universities.

(Note: I am not arguing that Boards should regularly meddle in administrative decisions: rather, I am arguing that Boards need to be knowledgeable enough and dogged enough to ask the hard questions to keep administrators honest and stuck to achieving institutional goals.  I’m of the school that believes that Boards should agree to about 95% or more of what admins present to them, and if it falls below that then it’s time for a new President.)

The second take-away from this year is the backlash against using international students to fund our system.  This is mainly because the higher rents in communities bordering the institutions most active in this scene are (correctly, I think) seen as a tax on non-home-owners being imposed for the dubious privilege of having a college or university in the neighborhood.   I’ve heard via the grapevine (because of course no official data will be available for another 18 months) that international students now make up 45% of the student body in Ontario colleges.  Everyone (and I mean everyone) knows the current path is madness, but no one wants to be the first to leave the race for all those easy, easy dollars.  Saner minds will eventually prevail on international students – ones that will try to focus on improving the quality of international education rather than the MOAR MOAR MOAR of the last few years – and when that happens, everyone will wonder how we allowed things to get out control in the first place.

The reason we’ll remember these stories in particular?  Because I am pretty sure 2023 or 2024 will be the year the iron triangle will finally going to start to pinch.  This triangle has three sides: government-controlled funding (that is, government grants and domestic fees), international student fees, and stable institutional budget, by which I mean budgets that at least increase along with inflation.  For the last if these three sides to grow, at least one other side of the triangle has to be growing, too.  In the ‘00s, it was government-controlled funding that was growing; in the ‘10s, it was international students.  In the 20s…?  It’s not clear to me that either of those sides will still be increasing.  And that means there will be serious pressure on that third side.

A main issue is that Canadian universities are almost ungovernable when not growing 2% or more after inflation.  Fall below that level and the gears start to scream and grind.  More and more pressure is going to mount on administrations – and, indirectly, Boards of Governors – to make difficult choices concerning university resources (or perhaps – as in Laurentian’s case, not to make difficult choices and hide trouble instead).  The question is whether we have the right kind of oversight to ensure these decisions are first made, and made in the public interest.

To be clear once again, “in the public interest” almost certainly does not mean “status quo”.  Most universities, if they were being honest with themselves, would admit to having trouble investing money in the right kinds of things.  The pressures inside universities (more so than colleges) in favour of status quo and distributing resources widely rather than in a focused manner are enormous.  Much of the tension between Boards and Senates basically boils down to one side saying “we need to spend less money/money differently” and the other resisting changes to the status quo.  Whatever arguments are advanced for the status quo, they are usually cloaked in an accusation that Boards can’t possibly get spending right because they don’t know universities very well (which overall is true). 

But conversely, what Senates know about resource prioritization is also pretty much squat (or at least if they know about it, they usually choose not to act on it), and in any event, simply knowing how a university works is in no sense a guarantee that decisions made by those who do will be done “in the public interest”.  Indeed, this is precisely why Boards exist in the first place, or, in those countries where they do not, the big financial decisions get made by public servants in the Education Ministry. 

In short, I think the system is coming close to the reckoning it has been avoiding for a decade by relying on international student fees.  It’s going to force everyone in the system – Boards, Senates, administrations – to up their game on governance.  And by this I don’t just mean making the formal mechanisms of governance work better, I also mean making the informal ones work better too – such as the whole notion of rapid collegialityI described back in August.  Finding ways to have lots and lots and lots of low-stakes discussions (i.e. NOT at Senate or Board) between different stakeholders to understand what people truly prioritize and value is crucial. 

Because the problems of this decade aren’t going to be solved by “heroic” alpha-male posturing such as what we saw at Laurentian.  It’s going to be solved by large numbers of people with goodwill coming together and making difficult decisions in full awareness of resource constraints and without an instinctive defence of the status quo.  Institutions that can manage this will do fine: those that can’t are going to be nightmares to manage. 

So, from my point of view the only serious question for 2023 is: what can institutions do to move towards this culture of rapid collegiality?  There are dozens of potential answers here, and the correct set of answers will differ from place to place.  But the important thing is to pose the question in the first place.  It’s not something easily placed on a Board or Senate agenda, but it is something that most institutions could benefit from addressing sooner rather than later.

In short: next year, the biggest issue over the next couple of years is going to be how to run universities more leanly.  But at the smarter institutions, this is going to be accompanied by some deep thinking about governance. And not before time.

Happy holidays to all; please take the chance to rest up.  And as usual, feedback and ideas for posts always welcome at info@higheredstrategy.com.