An Outsider’s View of Governance Models

Different models exist for structuring campus governance. Are any of these models right for your institution?

By Leon Trakman

Most colleges and universities across the British Commonwealth and the United States face crises of confidence in their leadership or their financial systems at some stage in their evolution. This paper offers a brief reflection on some governance issues in higher education from the perspective of a Canadian who has served as a dean of law in Australia and who was educated and has taught in the United States and Canada.

Governance problems often have common roots and similar attributes and can lead to similar results. Some governance problems are distinctly structural, arising, for example, when large boards of governors represent many different, and competing, interest groups. Many are financial, such as those that arise from government cutbacks or declining enrollment. Some crises relate to the nature of governance models themselves. Some governance models are autocratic, not collaborative enough, while others may be cumbersome, involving too many constituencies in the institution’s decision-making process. Each crisis raises the question of whether the development of good governance practices could have averted the crisis or mitigated its impact. College and university governing bodies should understand, and take advantage of, opportunities to develop good governance practice.

Shared Governance

Shared governance reflects the view that colleges and universities ought to be run by their most immediate stakeholders, primarily by faculty, professional staff, and students. The rationale is that governance should inhere in those who have the greatest stake in the university and are best equipped to understand its academic mission. The enemy is perceived to be those who would corporatize universities in the name of economic efficiency.

Shared governance is the model to which colleges and universities most frequently return when difficulties arise with the alternatives, but it is also the most frequently attacked model. Critics of shared governance often claim that faculty—who typically participate in governance through faculty senates and other duly constituted bodies—lack the skill and interest to identify and relate to external stakeholders, such as commercial partners and governmental agencies, and to conduct financial and personnel matters. At Oxford University, for example, faculty have firmly resisted “the managerial bandwagon” that threatens to undermine Oxford’s well-established model of faculty governance.

Summarily dismissing shared governance models because faculty members may not have financial expertise amounts to throwing the baby out with the bathwater. Faculty participation in governance has produced positive results—for example, in building governance structures and in strengthening relationships with labor unions and students. Faculties have also helped to create excellent training programs in governance, such as that at Harvard University, which has long specialized in training corporate executives in governance and management.

Many educators appreciate the importance of shared governance. For example, the Dearing Committee on Higher Education in the United Kingdom in 1997 firmly recommended not only that “institutional autonomy should be respected” and that “academic freedom within the law should be protected,” but also that “governance arrangements should be open and responsive.” In effect, the committee indicated that faculty and professional staff should set academic standards and determine curricula; faculties should be primarily responsible for decisions on academic appointments, rank, and status; and faculties should preserve the academic freedom of their membership.

Corporate Governance

A true corporate governance model features a drastic reduction in the number of faculty, staff, and students who comprise the primary internal stakeholders on governing boards. Appointed in their place are external members who have financial training and expertise. Many public institutions, both in the United States and in the British Commonwealth, are increasingly following a corporate model, partly in response to the criticism that they have performed inefficiently in determining governance policy and in demonstrating fiscal responsibility. In some respects, the University of New South Wales in Australia, where I have served as dean of law for five years, is a leader in the development of corporate governance. Generally, however, the corporate governance model has evolved reactively rather than proactively in most developed English-speaking countries. For example, the move toward a corporate governance model is sometimes the product of severe economic difficulties, such as those that recently occurred in Ontario, Canada, where reduced government funding, the abolition of mandatory retirement, and a decline in full-feepaying international students have had a combined impact.

Even those who adopt tempered corporate governance models debate the extent to which large public universities ought to mirror “big business.” Most grudgingly admit that “big universities” include diffuse centers of profit and loss, have complex budgets, and “sell” their educational services to disparate “buyers” within a competitive and sometimes cutthroat marketplace. There is also discomfort that some public institutions pursue full-fee-paying local and international students more in order to “balance the books” than for any other reason. Administrators are obliged to satisfy the immediate fiscal needs of their institutions, and corporate efficiency is one way to do so.

Whatever their limits, corporate governance models are widely used in public colleges and universities. They have evolved out of concern over financial deficiencies in shared governance models. Their use, however, has raised doubts about whether they are adequately adapted to the academic enterprise, since producing a high-quality education obviously differs from returning a profit to shareholders.

Nevertheless, the view that colleges and universities need to “corporatize” to some degree if they are to be governed responsibly is becoming more widespread. Differences between educational institutions and for-profit corporations should not be seen as barriers, corporatization advocates argue. Some institutions seek middle ground by adopting an amalgamated model of governance in which corporate governance is employed in tandem with other governance models.

Trustee Governance

The trustee model of governance has acquired some credibility in public institutions generally. For example, in 1995, the influential Hoare Report in Australia recommended, among other actions, the wider adoption of trustee governance and less representational membership on governing bodies.

Trustee governance is different from shared governance. Shared governance refers to partnerships in governance, such as those among students, faculty, and college and university administrators. Trustee governance refers to the manner of governance, specifically through a “trust” relationship in which a trustee board governs the institution in trust for—and on behalf of— either students or the institution as a whole.

The trustee model is articulated structurally through a series of mechanisms that ensure that trustee boards fully discharge their fiduciary duties toward their trust beneficiaries. These mechanisms ensure, for example, that boards of trustees comply with fiduciary duties of confidentiality and avoid conflicts of interest. It is particularly in times of financial crisis that colleges and universities turn to trustee models of governance.

The notion of trustee governance requires those who govern colleges and universities to discharge the ir fiduciary responsibilities with the utmost of good faith toward the trust beneficiaries, whether they are students, staff, the public, the government, or a combination of them. There are few self-evident instances of the trustee model in public colleges and universities, although the metaphor of trusteeship is often invoked to stress how a particular institution fulfills its fiduciary duties.

Trustee models of governance have most currency in British, Australian, Canadian, and American universities during crises caused by financial mismanagement and leadership. Trustee models are also called for during crises over leadership decision making, such as those that recently occurred in the University of Colorado system during the football-recruiting scandal and again during the Ward Churchill controversy. Trustee models, however, work around the edges of governance rather than at the core.

Choosing a Model

The model that a college or university claims to adopt is not necessarily the model it employs in practice. Governance modeling is sometimes used as window dressing to appease disaffection within and outside the institution, or simply to create an appearance of responsible governance. Sometimes conflicts over governance are dressed up as crises of confidence in individuals. Models of governance are also affected by factors in institutional culture, such as a history of autocratic governance by a board of governors or, conversely, consultative governance in which governance decisions are reached in consultation with key stakeholders such as faculty, staff, students, and alumni.

In selecting a particular governance model, members of a board of college and university governors or trustees should determine, as a first principle, what they hope to achieve through a preferred governance model. Their modus operandus should also include understanding what their institution lacks and what particular modifications to its governance structure might achieve. If the problem is a scandal, a trustee model that specifically seeks to rebuild trust might be appropriate. If the problem is financial, a corporate model might be suitable. If the problem relates to building high quality academic programs, a faculty governance model may be preferable. If the problem includes a combination of issues, then an amalgam model might work best. 

Governance models sometimes need adjusting or replacing. Colleges and universities should be able to remodel their governance structures incrementally. In making change, they should carefully review their reasons for structural reform. For example, they may ground their governance review in having “lived through” a governance crisis and may revitalize governance protocols to avert similar crises in the future. In some cases, this means securing objective and expert advice from informed third-party sources, including reputable organizations that consult on governance. In other instances, insiders should conduct governance reviews based on their particular situations, especially in the face of delicate human relations and where confidential processes are needed to resolve differences.

In modeling change, it is also useful to identify the issues that are associated with particular governance models. Why is a particular governance model or structure suitable at a specific institution at a particular time and place, and how might that model be reconstituted or reconfigured in response to a particular issue or crisis? These are not easy questions to answer. But they are questions that should be addressed, not only when governance problems arise, but also in anticipation of a problem and in order to avert it, or at least reduce its harmful impact.

Ultimately, one should not expect the impossible. Governance models are created by people to govern people and are only as good as those who devise, implement, and live by them. “Good” governance also does not simply happen: it is the product of painstaking effort to arrive at suitable governance structures, protocols, and processes. “Good” governance is about both timing and judgment, in determining when a governance model is not working and why and how to fix it. Colleges and universities can show resilience in the face of social, political, and economic change by being willing to consider difficult issues. When they fail to read the signs of impending difficulties in governance, colleges and universities are most at risk.

Leon Trakman is the immediate past dean and professor of law at the University of New South Wales in Sydney, Australia. He writes extensively on education and dispute resolution, among other topics. For further information, see www.trakmanassoc.com.

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