Is the Prez On Board?

In some senses, Rodney Erickson is among the people in charge of overseeing his job.

Erickson, like his predecessors as president of Pennsylvania State University, is one of only a handful of public university presidents who also sits on and has a vote on his university’s governing board, a practice that has come under scrutiny as individuals examine every aspects of the university’s governance structure in the wake of the scandal surrounding former Penn State assistant football coach Jerry Sandusky.

In July, Jack Wagner, the state’s auditor general – an elected position, and the state’s chief fiscal officer – called on state lawmakers to change the statute governing the university’s board to remove the president from the board. “These changes would make clear that the president and CEO of the university cannot be both an employee and also an equal to the board,” Wagner said in a letter to leaders in the state legislature. State lawmakers would have to approve any changes to the university governance.

Wagner's office is compiling a report for lawmakers on the university's governance due out by the end of the month that will make recommendations on how to structure the board.

It's standard practice at most colleges and universities for presidents -- on or off the board -- to attend most of board meetings and gather regularly with trustees. Higher education leaders and governance researchers believe this is good practice and unlikely to change. At the heart of the current debate is whether presidents should have the authority to cast votes as board members.

Researchers who study institutional governance say the practice of giving the president a voting seat on the board can lead to potential conflicts of interest or awkward situations in which the majority of the board votes against the president. “It’s best practice not to have the president on the board,” said Richard Novak, senior vice president for programs and research at the Association of Governing Boards of Universities and Colleges. “It’s better in the public’s mind if there’s a distinction between the president and the board.”

Even if board members and the president see eye-to-eye, and even if the president recuses him or herself on certain issues, there can be questions about accountability, given that boards evaluate presidents and set their salaries.

But the prevalence of the practice among private universities – more than half give their presidents a vote on their governing boards – indicates that it is likely not harmful to the university’s health.

Multiple researchers said they’re not sure why the practice is so much more common among privates, though several suggested the practice was likely modeled on the private sector, where CEOs traditionally sit on their governing boards.

Board Structure

The question of how to structure public university governing boards to ensure efficient and optimal governance has popped up in several states in the past few months, including the Universities of Virginia and Vermont, for a variety of reasons. Like the University of Virginia, which experienced its own turmoil this summer, any governance changes at Penn State are likely to be widely reported and watched.

But in this latest round of governance questions, Penn State is the first institution to grapple with the idea of whether its president should be on the board. Wagner said he is looking into what Penn State's peers do, but that is unlikely to provide any standard practice.

According to a 2010 survey by the Association of Governing Boards of Universities and colleges, 6.3 percent of public universities included the president as a voting member of their governing board. Another 21.2 percent include the president as a non-voting member. Among doctoral universities like Penn State, 7.5 percent give the president a vote and 22.6 percent give the president a seat without a vote.

Among private nonprofit institutions, however, a president on the board is the norm. More than half of all private institutions in the AGB survey said their president was a voting member, and more than two-thirds include the president in some capacity.

Several of the public institutions where presidents have a vote on the board, like Penn State, have had complicated histories that wind through public and private status. Penn State's president has been part of the board since the university was founded in 1855. Other universities where the president sits and votes on the board include the University of Vermont and the University of Delaware. Community colleges are also more likely than other public institutions to give presidents a voting seat on their boards.

Researchers said they tend not to like the practice, regardless of institution type, since it confuses the president's responsibilities. "It's not a practice I recommend," said Richard Chait, a professor at Harvard who studies university governance. "Not only because there are conflicts of interest but because presidents are better positioned to hold their boards accountable if they are not members."

Penn State Problems

Penn State’s board has a number of features that make it distinct from other public university boards, an outgrowth of the university’s winding path between public and private status (and in-between). Unlike most universities, where all or most of the board members are appointed by state politicians, Penn State's board consists of several members who are elected to represent specific groups or are on the board by nature of their position. The board also elects several members itself, as is the norm for the boards at private colleges and universities.

One of the major critiques of the Freeh Report – the independent investigation the Penn State board commissioned about the Sandusky scandal – was that the university’s board was too deferential to the university’s administration, particularly former president Graham Spanier.

“The board failed to perform its duty of inquiry, especially when it was on notice that the university was facing a major risk involving the grand jury investigation,” the report stated. “The board therefore did not meet its ‘continuing obligation to require information or answers on any university matter with which it is concerned.’ "

One of the recommendations made in the Freeh report was to "evaluate the span of control of the university president and make adjustments as necessary to ensure that the President's duties are realistic and capable of the President's oversight and control." The report also calls for a broad review of the board's structure, role, and appointment process.

Board member Kenneth Frazier, in a press conference after the Freeh report came out, said the board’s trust of Spanier prevented them from asking deeper questions about what was going on when they were notified about the grand jury’s investigation.

Critics like Wagner say that removing the president from the board might help the board be more critical of the university's administration.

Wagner's letter recommended several other changes to the board that will likely be a part of his final report, including removing the governor as a voting member but keeping him on the board.