Earlier this spring, AGB invited your comments on a draft a statement on fiduciary duties. We heard from many of you, and we are grateful for your contributions to this document. We hope that you will review the final statement and share it with all of your board members—especially new board members prior to their appointment to your board.
The fundamental responsibility of a board member of a college or university is to be a fiduciary for the institution that he or she serves. As such, a board member has duties under state law to the institution that a faculty member, student, or administrator does not.
But what exactly are the duties of a fiduciary? And how can board members, and the governing board on which they serve, best fulfill them?
To help educate board members about the elements of their fiduciary responsibilities and how to translate their fulfillment of those responsibilities into effective board conduct and oversight, we developed the “AGB Statement on the Fiduciary Duties of Governing Board Members.” This statement provides a roadmap for boards and their members so they can contribute effectively to the success and sustainability of their institution while avoiding problems and conflicts. Read the full statement now.
Understanding and appropriately carrying out key fiduciary responsibilities—a critical theme in “Consequential Governance,” the report of AGB’s National Commission on College and University Board Governance—is ground zero when it comes to a board’s most fundamental purpose and commitment. As the statement notes, “Behind nearly every failure of governance and leadership in higher education institutions is a breach of the principles of fiduciary duty.” In contrast, governance is significantly improved when board members and presidents share a mutual understanding of the standards that define their fiduciary obligations.