The Week In Ethics Blog

"Engaged Trusteeship," Stakeholders and UVA Governance

"Engaged Trusteeship," Stakeholders and UVA Governance

Posted On: Friday, March 15, 2013

photo of strength
Strength invokes a sense of power, muscle, vigor, and force.
It can, under the right circumstances, be a source of wisdom that invites collaboration, engagement, innovation and inspires trust.

In university governance, there is increasing tension about how authority is held or shared — how strength plays out. With the increasing involvement of business leaders in higher education, will they use the business style most comfortable to them or consider what would work best in a traditionally collaborative environment?

Turmoil at the University of Virginia (UVA) continues around how the Board of Visitors (trustees) is carrying out its authority. In spite of the board’s requesting that the Faculty Senate rescind its June 2012 vote of no confidence in it (for its process in ousting President Teresa Sullivan) the Senate has yet to comply. Sullivan, in her remarks to the board when she was reinstated June 18, 2012  said, “Corporate-style, top down leadership does not work at a great university. Sustained change with buy-in does work.”

One proponent of the actions of UVA’s board was the American Council of Trustees and Alumni (ACTA). In emails made public, ACTA President Anne Neal commended the board for doing its job, saying faculty and public outrage was “misplaced.” Neal wrote: “This is about the board’s responsibility to bring courageous, even innovative thinking to higher education when it is faced with many challenges….” ACTA is a proponent of what it calls “engaged trusteeship.”

This raises the question of what engaged trusteeship means in application. Does it preclude acknowledging a shared responsibility for governance among trustees, administrators and the faculty even as trustees by law have ultimate responsibility? Or preclude a recognition of the importance of stakeholders and building trust? The UVA experience would certainly seem a poster child for lost trust.

This week, the American Association of University Professors (AAUP) issued a report on its investigation of President Sullivan’s dismissal, which it termed a “breakdown” in governance. The report referenced the business background of chair (rector) Dragas and most trustees, saying few had any experience in the governance of large, complex institutions. The report took issue with Dragas’ justification for Sullivan’s removal (that she lacked “boldness” and alacrity in “effecting transformative change”)

The report said in part,: “The rector’s rhetoric reflects a mindset of entrepreneurial control common in small and medium-sized business enterprises. The firms that occupy that economic niche must adjust quickly to changed market conditions, consumer tastes, and rapid shifts in financing or other aspects of the business landscapes. Managers of such enterprises may be taken on or let go, on short or no notice on the basis of a perceived need to change direction…or even a lack of compatibility with those in entrepreneurial control. This mindset ill fits the role of trusteeship in the modern university.”

AAUP and ACTA disagree on whether UVA’s accrediting body, the Southern Association of Colleges and Schools Commission on Colleges (SACSCOC), had the authority to place UVA “on warning”  for governance violations involved in removing Sullivan. ACTA has made an appeal to U.S. Department of Education Secretary Arne Duncan whose department upheld SACSCOC’s authority.

Meanwhile the issue of whether the board is micromanaging Sullivan and setting her up to fail persists. Information this month revealed that the board committee evaluating Sullivan had increased her goals for the academic year to 65, more than 20 of which Sullivan said she hadn’t seen before; the Faculty Senate responded to this and Dragas responded to them asking that they work together to build trust.

The challenge is that trust isn’t a top down invitation; it is a by-product of how authority is used and stakeholders involved and engaged.
While the top-down method isn’t a model for rebuilding trust, increasingly, business culture has changed for many companies as stakeholders have taken on greater importance and caused shifts in organizations’ openness,  transparency and desire to build shared value. Ironically, for UVA, they need look no farther than their Darden School of Business, and Professor Edward Freeman, for a leading authority on stakeholder management.

UVA has been under a microscope for nearly 10 months, a bellwether for issues facing higher education. How engaged trusteeship and engaged stakeholders are defined and connected will determine the university’s strength and its capacity for sustained growth and innovation.
Gael O’Brien March 15, 2013

Note: The rock pictured above was painted by a student at Robert Adams Middle School.

Gael O'Brien

Gael O’Brien is a catalyst for leaders leading with purpose and impact through clarity, presence and connection so that they create engagement that transforms their companies’ future. She is an executive coach, culture coach, speech coach and presenter. She publishes The Week in Ethics and is a Business Ethics Magazine columnist, a Kallman Executive Fellow, Hoffman Center for Business Ethics at Bentley University and a Senior Fellow Social Innovation, the Lewis Institute at Babson College.

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