Every college and university has a governing board that is supposed to exercise oversight. Its job isn’t to run the details, but to steer the institution toward good outcomes and away from bad ones. One seemingly bad outcome — soaring costs — has for the most part evaded college boards. Why?
In today’s Martin Center article, Jay Schalin considers that question in the light of a recent book Runaway College Costs, by James Koch and Richard Cebula. The authors have tried to explain why governing boards have for the most part been ineffective in holding down costs, but also where they have been more successful.
The huge problem is that boards are mainly composed of people who are inclined to smile and say “yes” to whatever the president wants. Schalin explains, “The authors attribute much of this deference to administrators to the ‘charisma’ of presidents. Trustees are ‘wined and dined’ and flattered by schools; ‘satisfied trustees less often challenge ideas coming from the president’s office … [m]ost trustees buy into the president’s narrative about what the institution is.’”
Another problem is that school administrations largely control the flow of information to board members. That badly compromises the idea of independent oversight.
An interesting finding relates to the size of boards. Smaller boards tend to do better at controlling costs than do large ones. Why? Schalin writes, “The authors surmised that members of larger boards are less engaged with each other and therefore more easily manipulated by administrators.”
One good sign is that more boards are insisting on incentive provisions in the contracts for presidents; don’t just set a salary, but tie compensation to key objectives.
Schalin concludes, “Runaway College Costs frames the problem of board governance in such a way that others may be able to use it as a jumping-off point for further inquiry.”
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