The below is excerpted from the introduction; download the full statement.
Although the precise point at which a college or university governing board may justifiably be called “accountable” is elusive, the issue of board accountability warrants attention. Certain elements of board accountability—observing the highest standards of fiduciary duty, avoiding the taint of conflict of interest in decision making, and scrupulously observing applicable federal, state, and local laws—seem so obvious as to need little elaboration. Beyond such familiar requirements, however, the terrain is less plainly marked, and greater clarity will help the higher education community and the public better appreciate the full measure of board accountability.
The AGB Board of Directors believes that though the overall performance of the governing boards of America’s colleges and universities remains commendable, documenting certain policies and practices will foster confidence among presidents and chancellors, trustees and regents, and the general public that these boards are performing responsibly, effectively, and accountably. The AGB board believes such guidance to be in the public interest as well as that of higher education.
This view recently was underscored by the “Report of the AGB Task Force on the State of the Presidency in American Higher Education,” which recommended that the association develop a formal statement addressing board accountability and fiduciary responsibility. Development of such a statement also comports with the heightened emphasis being placed on accountability and selfregulation by the Panel on the Nonprofit Sector convened by Independent Sector.
Adoption by the AGB Board of Directors of this “Statement on Board Accountability” reflects a prevailing set of conditions:
- Growing pressure on many sectors of the nonprofit community for greater accountability presents a compelling opportunity to address this issue.
- Changes in the legal and regulatory environment (exemplified by Sarbanes-Oxley legislation), though largely designed to address problems in the corporate sector, are not irrelevant to higher education.
- Lapses and failures in the integrity and governance of certain participants in the nonprofit and higher education communities—particularly in such areas as conflict of interest, executive compensation, and financial oversight—have raised troubling questions.
- Increased scrutiny from congressional committees and state officials, and a litigious environment that affects all colleges and universities, call for clear articulation of the principles of autonomy and authority of governing boards.
The goals and aims of the AGB board’s “Statement on Board Accountability” include the following:
- Reaffirm within the higher education community, and explain to a broader audience, core principles of board accountability and responsibility. (A summary of basic responsibilities of governing boards appears as an appendix.)
- Impart a deeper appreciation of the gravity of concerns regarding governance, threats to board authority, and institutional autonomy.
- Recognize a sense of urgency about responding to such concerns before rigid external regulation preempts responsive internal action.
- Secure a wider and deeper commitment of boards to broadly shared principles and policies.
- Place college and university governing boards at the forefront of the nonprofit sector’s response to concerns about governance and accountability.
- Provide appropriate overarching policies so credible that their acceptance across higher education is an inevitable response.