Monday, September 10, 2007

Dartmouth: A Last Observation

By Richard Vedder

Dartmouth College has done it, it has gone ahead with a plan to dilute alumni participation in university governance. The way they have done it is less egregious than some earlier efforts, but it still seems like it is an attempt by the administration to dilute the influence of an increasing number of troublesome people who want real accountability. They have decided to make the board larger than the current 18, arguing that 18 is too small. I happen to disagree, and believe truly effective boards of more than 15 are rare. My university functions with one of nine (who nonetheless fail to perform their fiduciary responsibilities to the public by truly evaluating administrative decisions).

I suspect that this move is going to cost Dartmouth some real significant amounts of alumni contributions --which is good in my mind. It is time that alumni and other philanthropists get smart and tough in the allocation of their largess --and demand real, meaningful accounting on the use of funds. The Robertson family lawsuit at Princeton is a great thing, in my mind, because finally people are challenging colleges that use gifts in a different fashion than intended without the approval of the donor or his/her heirs or representatives.

The whole issue ultimately boils down to "who owns the institution." The legal answer, usually, is that the Trustees are the owners. The issue of who the trustees are, then, is the equivalent of asking "who are the controlling stockholders" in for-profit private enterprises. Everyone thinks they own the institution --the alums who are loyal users and financiers of educational services --the administration who runs the place, the governments that increasingly finance activities even at the private schools, the faculty, who are the institution in terms of being the critical inputs used in providing services, the students and their parents, who pay much of the bills, etc.

In part the battle at Dartmouth is whether the governance should be done by the Administration jointly with the alumni, or by the administration alone. I tend to favor checks and balances and accountability, and I think the divided board as currently constituted is a better device for future success than the newly changed organization. Of course, the establishment trustees organization (Association of Governing Boards of Colleges and Universities) thinks the changes proposed are great, since this is an organization that, as far as I can tell believes, more or less, that boards of trustees should give money, act important, but do little of great substance (they would deny that of course). By contrast, the American Council of Trustees and Alumni (Anne Neal's group) has a better vision of university governance, believing in boards that actively challenge administrations and make them justify their actions.

I have said enough about Dartmouth College for a lifetime, so will move on to stories about other institutions. Dartmouth is a great school, and, as Daniel Webster so memorably said nearly two centuries ago, there are those who love it.

1 comment:

Cappy said...

Dear Richard,

Your post raises more questions than it answers.

What are the "earlier efforts" to dilute alumni participation that are more "egregious"? Are you referring to some other school?

What makes the board reform "an attempt by the administration" to do something? The board hires the president, who leads the administration. The administration is employed by the board and does not direct it.

Why would you believe that the opponents want "real accountability" rather than just influence over the board? Why would you believe that letting alumni nominate a minority of trustees would even create "accountability"? How does any board structure make the administration more "accountable" to the board?

Why do you suspect donations will drop when a majority of alumni opposed the lawsuit that attempted to control the board's actions, and the current capital campaign shows that donations are steady or rising, even since the reform? Why do you think Dartmouth does not already provide just as much accounting for its donations as the donors demand?

Why would you think the issue boils down to ownership? The battle was over whether alumni can elect trustees, not whether alumni should govern in concert with administration [don't you mean trustees?]. Everyone but the footsoldiers knew that alumni couldn't elect trustees, and that the law suit was just part of the alumni pressure campaign intended to retain influence. The board owns the institution.

What makes you think that an intentional minority of alumni-nominated trustees could ever provide "checks and balances and accountability"? What makes you think the board as currently constituted is structurally "divided"? It had a small minority of complainers pre-reform, but that minority was not inherent in the board's makeup and won't be prevented post-reform. What makes you think the board is among those that thinks boards should "do little of great substance"? Sure, there is a debate out there about the role of boards, but what makes you think Dartmouth's board has ever been on the side you disparage?

Why not see that the Dartmouth controversy was not a reaction to a failure of governance by the board, an abdication of responsibility, a failure of "accountability," or anything Neal criticizes? Even the opponents don't claim that their agitation was based on a feeling of that kind. The board's reform activities show just how active, involved, and concerned it is.

Why not note that the controversy was caused entirely by alumni, particularly a small and well-funded group of extremists who wanted to gain or at least retain influence for alumni (the uncharitable observer would say "for themselves") over the board? The controversy, including the lawsuit, was a disingenuous public relations campaign meant to mislead the public into demanding unwarranted influence for the benefit of alumni. The board could have caved, but everyone knew it did not have to give in.

Because it is obligated to benefit the school, not the alumni association, the board decided not to cave, and it maintained the reforms it had enacted for the benefit of Dartmouth. Those who attack the board may claim to love Dartmouth, but they aren't among the few who are actually obligated to do so, i.e. the board. When you find out what the agitators were actually demanding, in the courts and in the legislature, you will see that they don't love Dartmouth as much as they love themselves; in fact they often seem to hate Dartmouth.

Finally, what does the reform of the Dartmouth board have to do with affordability? The new trustees have not even met yet, let alone changed tuition. A post on the board's recent increase in financial aid would have been more relevant.