When schools do business with board members, who wins?
- Six years ago, a Chronicle review of institutional business relationships revealed that more than 600 private colleges and universities conducted business with the employers or corporate holdings of board members.
- A sample of the business dealings revealed direct payments to trustees for legal services or consulting, while most dealt with real estate and construction contracts.
- For many institutions, business relationships may not involve direct engagement with a trustee, but relatives and friends receiving contracts or employment with the institution.
While many stakeholders would view the trustee-institution relationship as one that should focus on the college's interest and not those of its members, the reality is that most trustees sign up for the work strictly for the benefits of membership, such as travel, meals and access to contract bidding. Many states have rules protecting and guiding these relationships, which in some cases, reap benefits for the college in corporate donations, workforce development partnerships and legislative relationship building.
It is important for presidents and trustees, who generally revile transparency in these kinds of deals, to be open about the benefits of mutual exchange as an asset to the institution. If students see the relationship as doing business with a trusted corporate partner, with a board member who wants the best for the institution's growth, all stakeholders may not be happy, but they cannot claim hidden agendas.
- The Chronicle of Higher Education Divided Loyalties