An often-volatile economy, changing demographics, and technological innovations in educational delivery are among the dramatic changes across higher education that have forced boards and institutions to question the viability of the existing business model. Flat or declining state support in real terms, lower investment returns in some years, shifts in federal support, and pressure to control tuition costs have forced institutions to find more efficient and effective ways to operate without compromising quality.
While financial assets are not the only assets requiring board oversight, board members have a responsibility to understand the institution’s finances. This includes understanding how board and management decisions affect finances and, in turn, how the institution’s finances affect those decisions. Not every decision that management and the board make is a financial one; however, almost every decision to carry out the institution’s mission has financial implications. This publication will help board members understand the financial context in which colleges and universities operate, which is critical to a board’s ability to carry out its fiduciary responsibilities.
With special thanks to Crowe Horwath. Visit www.crowehorwath.com.