Private university governance principles and practices?

December 12, 2008 10:10 AM

Are private universities non-profit institutions? What standards of transparency/accountability [to the student body and/or public] are they required to uphold? Examples of governance models?

I'm interested in the governance of private universities. If private universities are non-profit institutions, are they subject to the same accessibility requirements as NGOs?

What minimum standards of transparency and accountability are their respective boards or "Corporations" required to uphold? [e.g. publicly posting contact information for trustees, agendas, public meetings, any rights to call "executive" or "closed" sessions, publicly posted budgets, annual reports, minutes, etc.]

What standards of transparency and accountability to the student body do private universities uphold in practice? Do you know of any universities whose highest governing bodies have particularly transparent or accessible governance policies? Particularly inaccessible? I'm interested in theory, but especially in concrete examples.

What are the standards or norms for how private universities' board trustees are selected and whom is selected? Are these selection processes subject to any sort of democratic decision-making? Are there any private universities with students that sit on university boards?

Thank you!

posted by lunit to law & government (7 comments total)

You're asking two things here which aren't very closely related, and the second of which doesn't really have a single answer.

Most institutions of higher learning are 501(c)(3) entities. The requirements for maintaining this status are pretty lenient. Basically, you have to do charitable work, you can't do much in the way of political activism, and you can't benefit private interests. Other than that, there isn't much that can jeopardize your status as a 501(c)(3) entity, and the only transparency that is required of them is sufficient financial disclosure, usually in the form of a tax return and related documents, to satisfy the IRS that you're obeying the rules.

The second part of your question has to do with how non-profits are governed. The answer there is pretty much "However they want to be governed." Entities as disparate as individual religious congregations, major state universities, and soup kitchens all have 501(c)(3) status, and the standards for governance are all basically set by the entities themselves. Incorporation requirements, which include things like contact information, are all set at the state level, and are completely unrelated to federal non-profit status.

On a practical level, the "standards of transparency and accountability" of private universities to student bodies is generally "not very much." Private schools can do almost whatever the hell they want, and there's almost nothing the student body can do about it aside from voting with their feet, i.e. transferring. Governing bodies of universities don't usually have to report to anyone, though those with financial influence have ways of making their desires known and heeded. Every university operates slightly differently, and even concrete examples wouldn't help you make generalizations very easily.

Standards for selection of trustees vary widely. A religious denominational school might see its board selected by the national denominational organization. Other boards might be self-selecting, appointed by faculty, appointed by major donors, of something different altogether. The degree of authority vested in the board will vary too, though it's usually pretty puissant. I'm not aware of any universities with student representatives on their boards, but such a thing is completely possible.
posted by valkyryn at 10:33 AM on December 12, 2008 [1 favorite has favorites]

Most private universities are non-profit. Only a few are for profit. University of Phoenix is probably the most famous for-profit private university. I have no idea how for-profit universities are run. But as far as non-profit universities are concerned, all universities that I've encountered (private and public non-profit universities) have board of trustees that included representatives from the student body, faculty, and staff who are democratically elected by their peers. Many also have alumni reps. Some elect their alumni reps, other don't. Other members of the board are often brought in for similar reasons that other non-profits select board members-- their ability to raise funds.
Also, I think you're assuming that the governance happens at the board level. This usually isn't the case. Most of the time, the board merely rubber stamps the decisions that are made lower down.
posted by jujube at 10:40 AM on December 12, 2008

In my opinion, private universities are actually among the more circumscribed of non-profits.

Standards for governance, of varying scope and subject matter, are made and enforced by dozens (hundreds) of governmental, quasi-governmental, and private bodies, including general accrediting boards; professional-education-component professional licensing bodies; financial aid grantors (especially the U.S. Department of Education); and research and public service grantors (many different federal agencies as well). Highly influential, if not vested with effective authority over money or operations, are standards of all the many different scholarly and professional societies with which ladder faculty affiliate (although naturally their standards tend parochial to dwell upon tenure and academic freedom). Religiously-affiliated private universities will either be directly governed by a religious body or will be subject to significant influence by the hierarchs of the affiliated denomination.

All of this is on top of the basic regulation which covers all non-profits in the U.S.: the IRS's policing of 501(c)(3) status and the state charity regulators. Those basic non-profit rules are actually much stricter in terms of governance standards than those that apply to for-profit corporations.
posted by MattD at 11:13 AM on December 12, 2008

For-profit universities are businesses, plainly and simply. The overriding objective is profit, followed by education. A good example of a company has made a lot of money on this is Kaplan, which started as a test-prep company and in the last decade his morphed into a full-service educational provider including an online law school and a four-year college.
posted by parmanparman at 11:51 AM on December 12, 2008

The answer to your question varies tremendously from country to country. In the US, anybody can form a university and "governance" is really voluntary and achieved through accreditation. There are six regional accreditation organizations recognized by the Council for higher education accreditation and US Department of Education. These are semiofficial organizations and most legitimate universities in the US are accredited by one of them. However, accreditation is not required. Nevertheless, many employers require that a degree be from one of those accredited organizations, making it a de facto standard.

In many European countries the situation is different. Universities have to be approved by the Government and adhere to whatever requirements are imposed. However, this varies from country to country and even between different regions.
posted by Brennus at 12:31 PM on December 12, 2008

Thanks for the responses so far!

I'm interested specifically in the United States, but I'm open to examples in other countries, too.

Thanks for all the information about what boards and non-profits are required by law to do (seems like the answer is very little). As to the second part of the question, what I'm interested in primarily is this: What are reasonable expectations of transparency, accessibility, and accountability for the board (and/or highest governing body excluding the President) of a private university to the public and/or student body? What are some examples of boards that make a special effort to be transparent and/or accessible? What do they do? How do those systems work?
posted by lunit at 12:47 PM on December 12, 2008

With respect to your latest question, Brennus and MattD are on to it: most of this regulation happens around the issue of accreditation, not non-profit status. The requirements for accreditation are ridiculously detailed, down to how specifying many minutes of classroom time are required per credit-hour, and that's merely one of the more obvious requirements. Look, for example, at the ABA accreditation standards for law schools. The NEASC process takes ten years to complete, and like most such standards includes a section on institutional integrity.

A lot of the structure of accreditation requirements is merely formally establishing what has been tradition for literally centuries. Deans have been a part of educational administration since the Middle Ages, and accreditation agencies generally require deans to have authority adequate to exercise their responsibilities.

Still, I think you'll find that transparency and accessibility for the board isn't spelled out very clearly, because in general, they don't have to be much of either. All that is generally required is that the working relationship between board, administration, and faculty be clearly spelled out. Notice that the student body doesn't appear on that list. That's because the student body is not required to have a say in institutional governance. Including the student body in such discussions is usually avoided where possible, because honestly, students don't know jack, and are generally incapable of really engaging the issues necessary to be a productive member of the discussion. They're only there for four years, and are much more concerned about how changes in university policy affect them than they are about whether such changes are good for the institution over the long haul.

Far more important is managing the relationship between the board, administration, and faculty, as many of the last two groups are almost impossible to fire. Tenure gives faculty a certain degree of power, as they can make life miserable for an administration, which has very little in the way of recourse. Students, on the other hand, can do absolutely nothing beyond making themselves a general pain in the ass, but unlike faculty, students will usually be gone in a few years, so neither the faculty nor the administration, both of whom could plausibly remain with the institution for decades, usually feels all that compelled to deal with a situation when they don't absolutely need to do so.
posted by valkyryn at 11:06 PM on December 12, 2008