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How University Boards Work Today Needs To Get Better Says Robert Scott

how university boards work must be similar to how one would run a business

Corporate governance has evolved dramatically over the last two decades, particularly for publicly traded for-profit corporations. Sarbanes-Oxley and various post-2009 laws like Dodd-Frank have generated large change in how public for-profit entities operate. Governance paradigms around the world are now being challenged for all types of entities including private for-profit and not-for-profit, mission-based organizations.  Author and American higher education leader, Robert A. Scott’s new book, How University Boards Work: A Guide for Trustees, Officers, and Leaders in Higher Education challenges the paradigm of governance for one of society’s more esteemed and revered organizations, Higher Education.  In his new book, Scott calls on College board members and University administrators to refocus on “educating” American students rather than just running an academic institution.  He also outlines a number of steps that institutions can take to improve their governance and performance.  The book is a well-needed call to action.

Scott is well known in higher education and has seen how Universities work up close.  He served long stints as the president of the public, Ramapo College of New Jersey and later Adelphi University, a private institution.

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According to Scott, educational institutions can better prepare the youth to become good citizens and successful individuals when the board and educators align their goals with the true mission of the university.  Scott calls for better alignment.  He writes, ” One of the great ironies of collegiate life is that faculty are often rewarded for doing less of that which is central to the institution’s mission (i.e. teaching and advising students.)  However, the irony can be understood when we realize that a faculty member’s personal priority is control over his or her time to pursue activities that will most likely lead to rewards of tenure and promotion.  For this reason, boards and presidents must work to align institutional priorities and the reward systems.”

“How University Boards Work” is a timely addition to the growing trend of creating quality guidelines when it comes to governing institutions of higher education all over the world.

Bold Ideas and Prescriptions for Improvement

In his exclusive interview with Bold Business, Robert Scott said: “The first bold idea is that the need to do a better job in the selection and orientation of board members. Just think about how a corporation would want a board member who understands the science or technology, the market, the competitive advantage, the competition for the products so that board member could contribute to strategic thinking and planning.”

“The second big or bold idea is a bit controversial because I think that University presidents spend too much time thinking of themselves as chief executive officers instead of chief mission officers or chief education officer,” Scott stressed.

In fact, it is found that for these institutions to gain better performance, they will need to balance both executive capacity and academic mission and this is where proper governance kicks in as there is a need to strike an equilibrium where equity and excellence exists.

Scott’s words are powerful and honest: “If you’re only thinking about or mostly thinking about budgets, fundraising, and labor issues, then you’re keeping your eye off the purpose of the institution – student satisfaction, student success, student retention, and student graduation.”

The high turnover rate of College and University presidents is indeed cause for alarm. Looking closely at the problem, there could be several reasons why leaders of academic institutions are leaving their posts after a short period of time. Scott’s guidebook offers a clear perspective on what the priorities should be.

Outstanding Reception from the Academe

Higher Education leaders are also in agreement with the bold concepts Scott is presenting.

Stephen Joel Trachtenberg is his co-author in the book Presidencies Derailed: Why University Leaders Fail and How to Prevent It According to Trachtenberg, a copy of this book should be given to new members of the board and trustees of universities as the book will improve their performance and benefit the institutions that they are currently overseeing.

On the other hand, Edward B. Fiske is the author of “Fiske Guides to Colleges” and believes that Scott has a complete understanding of how important it is to create a strong board of members. This is evident as Scott is possibly one of the most successful college presidents in the country in recent memory. Scott believes that it is important for board members to fully comprehend the idiosyncrasies of the academic institution that they are currently serving. He can clearly state both old and modern challenges that universities and colleges face when it comes to governance. Fiske goes on to say that the book that Scott had written should be the very first book that is given as an orientation packet for new trustees.

The high profile author of the book The Activist Director: Lessons from the Boardroom and the Future of the Corporation (Columbia Business School Publishing), Ira M. Millstein, also commends Scott on his book –believing that it is important to have a hands-on approach when it comes to any type of corporate governance.

This is the reason why Scott’s book is essential  for anyone who is currently governing our schools and universities. He also praises Scott for his unique perspective and solutions to the problems that universities face and attributes this to Scott’s 30 years of experience as the president of a university.

“I do believe that every college and college student should be, have the opportunity or the kind of transformative experience of engaging in a discussion of historic and new ideas with a faculty member who is dedicated to teaching and the students’ success,” Scott concludes.

More like a business and less like a special case

While Scott’s book should be hailed for its frank and insightful recommendations, we find Scott’s criticism of the “corporatization” of Higher Education somewhat disingenous and incomplete.  Virtually all publicly traded corporations today have robust systems of governance.  Governance systems today commonly address role and responsibilities of boards and their committees, interests of other stakeholders, integrity and ethical behavior, board selection processes, disclosure and transparency and alignment of incentives of management with shareholders and stakeholders.

Scott outlines serious deficiencies of basic governance issues for Higher Education in his book.   For example, misalignment of compensation and incentives in Higher Education is a serious issue.  In his interview, Scott said, “The rewards, for faculty, typically have very little to do with student success.”  Compensation alignment has been front and center for public companies for the past 30 years. It is time for Higher Education to get it right. Knowing who your customer is and stakeholder management are also areas where Higher Education could get a lesson from the corporate world.  We are generally fans of business solutions and efficiencies and do not rail against corporatization.  We believe Higher Education could benefit from more “corporatization” of its governance and management processes.  Author Scott’s How University Boards Work: A Guide for Trustees, Officers, and Leaders in Higher Education  has made a strong case for better governance and alignment.  A case we applaud.


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