Relations Between Presidents and Boards Top Agenda at Leadership Forum

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By SARA HEBEL, PAUL FAIN, and GOLDIE BLUMENSTYK

More than 250 college leaders and trustees gathered here last week for The Chronicle's first-ever forum on presidential leadership to discuss some of the most pressing job-related issues facing higher-education officials these days.

The meeting was held at a time when college presidents are under fire, with no-confidence votes and other presidential crises seeming to proliferate this spring.

In the forum's opening session, two former university trustees who served on university boards in the thick of controversies and two longtime college presidents urged more candor and more civility to improve leadership.

The panelists encouraged trustees to provide more-forthright critiques of college presidents and to do so early and often, before problems balloon. And they said that presidents must do a better job of keeping their board members informed about the issues they are facing and alert them to any potential problems as soon as they arise.

And for honest feedback and proactive dialogue to improve college governance, presidents and board members need to be more civil with one another, argued James A. Martin Jr., who served as a regent of the University of Colorado for 12 years before deciding not to run for re-election in 2004. He made the decision in part because he was frustrated by his inability to help bring about change at the institution in the midst of its football scandal.

"If you say the truth, you're marginalized and told you're not with the team," Mr. Martin said. Presidents and trustees, he added, need to learn how to agree to disagree and to remain friends at the end of tough but important discussions.

Rita Bornstein, president emeritus of Rollins College, which she led for 14 years, recommended that trustees and presidents seek to build respect and collegiality by scheduling occasional retreats or other social events.

"Governance is in a state of upheaval," Ms. Bornstein said, arguing that the misbehavior and greed of a few college presidents have led to an increased focus on oversight in higher education. She and other panelists said that the upheaval could lead to better governance at institutions across the country if presidents and trustees respond constructively.

"I'm optimistic that if we do this right, we will learn more about what are good board relations and good board activities," said Alan G. Merten, president of George Mason University, which he has led for a decade.

So, what should be done?

Mr. Merten started with the selection of trustees. The best ones, he said, understand complex organizations and do not come with political or narrow agendas. Presidents should not be afraid to lobby their governors or others who may have a role in selecting university governing boards for the kind of trustees they believe will be most effective, he said.

Once trustees are on the board, they should spend less time on trivial matters and make decisions more quickly, Mr. Merten added. "Some discussions just go on and on," he said. When he brings proposals to the board, he said, he just wants to be told yes or no.

Presidents can help themselves out, too, Mr. Merten said. They should identify their supporters on the board and use them to positively influence other trustees. Mr. Merten said presidents might want to use their allies on the board to suggest trustees whom presidents might be able to win over. and then take those trustees to lunch.

Other panelists suggested that trustees could perform their roles more effectively with more-thorough information gathering.

Ms. Bornstein said trustees should read all there is to know about the history and aspirations of the college, including its strengths and problems, and try to understand the culture of faculty members. Trustees should also keep up with the issues affecting higher education nationally, she said.

A.W. Pete Smith, who quit the board at American University during investigations into improper spending by its president, Benjamin Ladner, said trustees needed to be on campus more often, eating lunch there or walking around, as a way to keep in touch with how everything was functioning and what people were saying.

Trustees need to be vigilant, he said. A lesson that he said could be learned from American's recent difficulties was that boards could avoid huge problems if they asked the right, and often hard, questions about governance at their institution.

At American, Mr. Smith said, "there was smoke there before anyone saw the fire."

Mr. Martin, the former Colorado regent, urged boards to regularly and carefully scrutinize their presidents' performances.

"The first thing a board ought to do at the start of every meeting is to ask the question: Do we have the right president leading right now?" Mr. Martin said. Doing so, he said, would allow the board to focus on seeking needed improvements quickly, rather than serving as a rubber stamp for what the president wants.

"Most boards are in denial about the performance of the president or lack thereof," Mr. Martin said. And that can be especially true, he added, if they helped select the president and their egos are tied up with how well their choice for the job is performing.

The problems at Colorado, Mr. Martin said, illustrate the need for university boards to create crisis-management teams so they can respond more thoroughly than public-relations officials can when problems arise.

Richard P. Chait, a professor of higher education at Harvard University's Graduate School of Education and the moderator of the panel, said effective governance relied on strong leadership, and some humility, from all players.

"Ultimately, governance is orchestral, and there are very few roles for soloists," he said. "Take your work very seriously, and take yourself a lot less seriously."

***

'360-Reviews' Are 'Garbage,' Consultant Says

College presidents and governing boards often fail to devise clear measures and goals upon which presidents should be evaluated, according to members of a panel during another session at the forum. The speakers argued for yearly reviews, as well as longer-term goal assessments, and questioned the value of broad campus surveys as part of the review process.

William V. Frame, president of Augsburg College since 1997, said he pushed Augsburg's governing board to conduct a thorough review of his performance. "It took years for me to convince the Board of Regents that I wanted an assessment," Mr. Frame said.

When the board began reviewing Mr. Frame, he said, "what they offered was pure praise." This approach, he said, neglected to view his performance in context of the "big vision" of the college. And, by extension, it meant the board had yet to take responsibility for that vision, he said.

William A. Weary, president of Fieldstone Consulting Inc., agreed that boards share responsibility for articulating a president's priorities. "Any assessment of the president is an assessment of the board," Mr. Weary said.

Mr. Weary and Catherine Y. Selleck, chairwoman of the Board of Trustees of Occidental College, both were critical of so-called 360-degree reviews, which typically involve the distribution of five-page surveys about a president's performance to hundreds of administrators and faculty and staff members on campus. Mr. Weary called such surveys "garbage" because they are not targeted and can be manipulated by special interests.

"We decided the community was too small" at Occidental to conduct a broad survey, said Ms. Selleck. "And the opportunity for mischief was too great."

The panelists said presidential assessment was a key part of building a strong working relationship between presidents and boards. Mr. Weary said each board meeting should include a segment devoted to reviewing progress presidents have made in achieving goals, and that these discussions should be a "free-for-all" of questions between trustees and the president.

Although Mr. Weary said a president was "going to have a sharper vision than the board," presidents need board input and should have a "lengthy discussion with each trustee every year."

***

More Pay for Presidents Could Spell Trouble for Colleges

Whether there really is a shortage of top-flight candidates to serve as college presidents these days was a question on which many speakers and attendees at the forum disagreed.

But according to several experts, the perception that there is a candidate shortage is the chief reason so many college trustees are giving their presidents generous salaries and extra bonuses for taking the job and for staying on.

"When they find the candidate they want, they take out the checkbook and start writing," said Raymond D. Cotton, a lawyer who works extensively with presidents and boards on employment matters.

What's more, he and other experts on a panel on compensation issues said the trend could also set the stage for future tax problems and public-relations fiascos for colleges unless they are careful in how they make those arrangements and in how they explain them on public documents, like the Internal Revenue Service Form 990, which all nonprofit organizations must file.

"The IRS has been very aggressive about reviewing compensation," said Marcus S. Owens, a former IRS official who is now a lawyer in private practice.

Trustees of colleges and directors of other nonprofit organizations found to have knowingly paid excessive compensation could face fines as part of the so-called intermediate sanctions.

And that potential for danger also extends to arrangements outside the president's suite, Mr. Owens said, noting that colleges are increasingly paying incentive bonuses and other forms of nontraditional compensation to people who lead related groups, like an affiliated research organization or an athletics-support foundation.

"Your reputation can sink like a stone" because of the way you handle those relationships, Mr. Owens warned.

The IRS isn't the only organization that is watching, said John A. Mattie, who heads the national education and nonprofit practice at PricewaterhouseCoopers LLC.

Colleges and the rest of the nonprofit sector are receiving greater attention from a host of other regulators — including Congressional investigators, the Government Accountability Office, and accounting-standards boards — than at any other time in recent history. "Everybody seems to be putting out pronouncements" about compensation, he said.

To stay clear of public controversy and IRS sanctions, colleges should be sure to carefully document on the Form 990 the procedures they use to set compensation, as well as the terms and conditions under which things like longevity and incentive bonuses will be paid. "That's going to be the art form of the future," Mr. Owens quipped.

Colleges and trustees should also be prepared to explain to the news media and the public at large the compensation they are paying. "Context is everything," said Mr. Owens, suggesting that people will more readily understand payments for a period of service if they are provided information about the "achievements over time" by the president or other officials.