University Governance’s Missing Link

Editor’s note: This article originally appeared in the Raleigh News & Observer on July 15, 2013.

This has been a rough year for the University of North Carolina system. An ongoing scandal involving both academic and athletic departments continues to roil UNC-Chapel Hill, with the more recent wild antics of basketball star P.J. Hairston adding fuel to the fire. A second longstanding controversy involving sexual harassment and the school’s honor court procedures hardly diminishes questions about the system’s flagship’s governance.

Another academic scandal that opened up this summer at Winston-Salem State University may very well be more serious than Chapel Hill’s, while Elizabeth City State‘s chancellor was compelled to resign upon the discovery that many campus crimes had gone uninvestigated. Furthermore, the UNC-School of the Arts has been downgraded to probationary status by its accrediting agency, the Southern Association of Colleges and Schools.

Some of these problems might be attributable to individual personnel, but most are the culminations of many decisions made over decades.

Perhaps the way the UNC system makes major decisions needs improvement. After all, it’s been more than 40 years since UNC took its present form, with 17 schools administered by a system president and overseen by a 32-member board of governors (BOG).

One promising solution is to give the BOG its own executive director, answerable only to the board. For it is the board’s job to oversee the administration, yet the administration has the upper hand, largely due to the “asymmetry of information” problem. Briefly, this means that boards of trustees know much less about an organization than those they are to govern, the hired professional managers and administrators. As a result, boards are susceptible to control by the very administrations they are supposed to oversee.

Giving the BOG its own executive director could end the governors’ over-reliance on the administration to keep them informed and to set the system’s agenda. The Director’s position would require somebody who can objectively survey and analyze the entire range of information about universities and higher education policy. No longer would the board be forced to make decisions based on a few reports, speakers, or presentations cherry-picked by system officials to support the administration’s agenda, as often happens today.

The problem is not just restricted to the UNC Governors—board control of organizations, whether in the private, non-profit, or public sectors, is frequently ineffective or worse. Despite obvious inherent flaws, the law requires that every incorporation include a fiduciary board of trustees. Perhaps nobody can come up with a way for outside ownership to be represented in an organizational structure.

Much of the information problem stems from a Catch-22 dilemma that thwarts a board’s need for independence. In order to make a board independent, members must be recruited from outside the organization, and they therefore serve in a part-time capacity. These factors make their knowledge of the inner workings of the organization limited, at best, and puts them at great disadvantage to administrators, who have tremendous inside knowledge of the organization’s operation. This is especially true in the UNC system, with its many unique institutions scattered across the state and with board members having a wide variety of non-academic backgrounds.

In such a situation, administrators can hide problems from the board, show only aspects of the operation that serve their own needs, or choose which issues the board is to address. Without knowing what is really behind the information they are provided, board members are easily reduced to a “rubber stamp” committee—something UNC’s governors have historically been accused of.

That is not how the system is supposed to work. Creating a new position of executive director could greatly bolster the BOG’s presence by giving it a badly needed independent source of information.

The new executive director should be housed outside of the UNC General Administration’s offices; otherwise, the director could gradually regard him- or herself as part of the administration, with the staff considered co-workers, losing independence in the process.

The cost for an executive director of the BOG and the resultant expenses would be modest—certainly no more than $250,000. This pales in contrast to the tens or even hundreds of millions of dollars that could be saved annually by making the BOG a better and more independent watchdog of university system expenses.

The UNC system under its current design is now showing some foundational cracks. A little tweaking to strengthen the board could work wonders.