WORKING WELL WITH
THE BOARD TO GET
GOVERNANCE RIGHT
Association of Governing Boards
Working Titles

Governance Works; Until It Doesn’t
or

How to Have a Mediocre Board (and an Effective
Audit Committee)
What Does Your Board Do?
Partner in
Leadership and
Strategy
Hold
Accountable;
Verify
Confuse
Gov. with
Admin.
Interrupt
(and
Disrupt)
Eat and
Tour
The Goals of Governance
“Effective governance entails influential
participation in meaningful discussions about
consequential matters that lead to significant
outcomes.”
 Richard Chait
Chait, R.(2009, July/August). The Gremlins of Governance. Trusteeship. Association of
Governing Boards. Washington DC.
What Kind of Board Do You Need?
Strategic
Leader/
Partner
No Harm;
No Foul;
No Value
Board is
Bored
Low
Capacity
High
High
Low
Engagement
All Light;
No Heat or
Live Wires
Observations from the Field
Anxiety
Uncapped
Recognize
High(er)
Stakes
*And nervous presidents = stressed cabinets
Excited/
Excitable
Boards*
How Restless?

How apprehensive is your board?
1 (low)
2
3
4
5 (high)
What are the three things that keep them up at
night?
1.
2.
3.
Effective Boards?
Effective Boards?
Mediocrity more than Dysfunction
How to Have a Mediocre Board







Strive for under-engagement/Over-engagement
Never have new members
Develop unquestioned routines
Have the chair try to be president
Avoid focusing on the work of the board (only on
the work of the institution)
Re-structure committees frequently (board culture)
Confuse good philanthropy with good governance
How to Have a Mediocre Board








Confuse interest for expertise
CEOs vs. Lawyers vs. Deacons/Ministers
Expect “30 second answers” to “10 minute problems”
Do not learn to agree (or disagree)
Use the “loud-voice veto”
Avoid risk
Have competing agendas
“Women’s Golf”
Competing Agendas
“For the meeting, I need a copy of the agenda, the
hidden agenda, and my own twisted personal agenda.”
High Performing Boards

Focuses on strategic issues
Thought partners looking forward
 Willingness to make tough decisions



Monitors of progress and risk
Welcomes multiple perspectives; speak as one
Climate of openness and positive social dynamic
 Maintenance of confidentiality
 Respect for institutional governance model



Advances Mission
Embodies trust and candor; meaningful deliberations
How Mediocre/High Performing?



What makes your board effective?
What is one thing* you wish your board did
differently/better?
What is one thing that others could learn from your
board?
* Or two things, or three things, or eight things………
Questions and Thoughts
The Focused Work of Boards
Cost and Value
 Accountability, Transparency, and Risk
 Student Learning

Cost and Value of My Institution/HE
Too Expensive
Underpriced
Costs What It Should
42%
56%
37%
63%
6%
10%
35%
9%
Public My Inst
19%
48%
57%
18%
Private My Inst
Public HE
Private HE
Trustees on Affordability
Public
Private
45%
36%
30%
25%
20%
13%13%
10%
2% 2%
4%
1%
Some inroads; Need to do Doing all it can Should charge Already low- Outside board
could do more much more
more
cost
control
Trustees on Controlling Expenses
Does everything it can
Needs to do much more
1%
12%
Does many things
Is not trying to reduce expenses
1%
7%
41%
50%
51%
37%
Public
Private
Questions for Discussion



What do your trustees think about efforts to
control expenses and make your institution
affordable?
What type of information do you provide that
informs their views?
What questions might they ask better to govern
better?
Questions and Thoughts
Accountability, Transparency, and Risk:
The Audit Committee

First line of defense for:
 Financial
Reporting
 Internal Control
 Compliance
 Risk Management

Protector of your most valuable asset: Reputation
22
Growth in Audit Committees
Boards of Independent Institutions with an Audit Committee
23
Growth in Audit Committees
Boards of Public Institutions with an Audit Committee
24
Core Audit Committee Responsibilities
1.
2.
3.
4.
5.
6.
Internal Control
Oversight of Internal Auditing
Oversight of the External Audit
Financial Statement Review
Risk Management
Compliance
25
Risk Management


Committee should understand institution’s overall risk
profile
Enterprise Risk Management (ERM) – move from an
ad hoc to a holistic view of risk
26
Risk Management

Five Key Areas of Risk
Strategic – Organizational strategic goals
 Operational – Day-to-day activities in pursuit of these
goals
 Financial – Organization’s physical assets and financial
resources
 Compliance – Internal and external reporting requirements
 Reputational – Institution’s public image

27
Risk Management
Best Practice for Implementing ERM
1.
2.
3.
4.
5.
Define risk broadly
Recognize both the opportunities and downsides of risk
Develop a culture of evaluating and identifying risk at
multiple levels
Look at the total cost of risk
Foster collaboration by Boards and presidents
28
Compliance



Recent addition to the audit committee role
Compliance: Recognition of and reporting under
various federal, state and local laws and regulations
“Clusters” of Regulation






Privacy
Copyright
Discrimination
Campus Security
Financial Transactions
Need to determine who owns compliance
29
Current Tension Points



Where does the CFO’s “loyalty” lie?
Does the audit committee need to oversee other
board committees?
Delegation of authority for audit approval
Thoughts and Questions
Overseeing Educational Quality
The Role of the
Board
Sufficient Time on Student Learning?
Yes
38%
Not
Enough
62%
Too Much
0%
Time Spent: Money vs. Mission
57%
Relative balance of time
on academic and financial
issues.
22%
Much more on
finance/budgets
Slightly more on
finance/budgets
3%
2%
Slightly more on
academic issues
Much more on
academic issues
More Time and Attention (or Not)?
How has the
board’s attention
changed in the
last five years?
Don’t know
15%
About the
same
31%
Less
attention
now
1%
More
attention
now
53%
Impediments to Overseeing Learning
Impediments, if any, to the board’s understanding of
student learning outcomes
Lack of interest
No impediments
Not the Board's role
Not enough time
Other priorities
13%
16%
22%
45%
64%
The Curriculum is the Faculty’s
Responsibility…
The Board’s Role is to Remind Them of
This Responsibility



Ensure that the institution has an appropriate set of
learning outcomes statements
Ensure that efforts to determine the effectiveness of
teaching and learning are in place and ongoing
Ensure that institutions use the data they collect for
improvement
Peter Ewell. Making the Grade. AGB
Key Board Questions: Our “Product”
•
How good is our product?
•
How good are we at producing our product?
•
Are our customers satisfied?
•
Do we have the right mix of products?
•
Do we make the grade?
Source: Making the Grade: How Boards Can Ensure
Academic Quality, Peter Ewell (AGB, 2006)
Impact Through Collaboration
Collaboration (in Higher Education)
CFOs and Student Learning
Collaborate with CAO
Cross-Walk Committees
Leverage
Your
Strengths
Remind
others of
your
commitment
Thoughts and Questions
Thank You!
43
Please visit agb.org for more governance resources, including
the Effective Committee Series.
To receive a copy of today’s presentation or to inquire about consulting or
other AGB services, please email BECS@agb.org
For information from our presenters, please contact
Peter Eckel (peter@agb.org) or
Rick Staisloff (rstaisloff@rpkgroup.com )