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Restructuring Public Higher Education Governance to Succeed in a Highly Competitive Environment

Research & Occasional Paper Series: CSHE.6.15 UNIVERSITY OF CALIFORNIA, BERKELEY http://cshe.berkeley.edu/ Restructuring Public Higher Education Governance to Succeed in a Highly Competitive Environment June 2015 James A. Hyatt UC Berkeley Copyright 2015 James A. Hyatt, all rights reserved. ABSTRACT Given diminished governmental support, competition from private counterparts, and public demands for access to services, public universities need to respond in an effective manner to take advantage of opportunities and meet the challenges of today’s highly competitive environment. A critical factor in meeting these challenges is the manner in which these institutions are governed. Today’s governance structures must enhance institutions’ ability to generate resources from multiple sources - tuition and fees, gifts from donors, governmental support, and partnerships with the private sector. To achieve this, authority must be vested at a level where institutions can respond to challenges and opportunities in a timely and nimble fashion. The history of governance of public higher education is characterized by a wide range of models--a single governing board responsible for a single institution, a board overseeing a university with branch campuses, university systems with a single governing board for multiple universities. Changes in governance have occurred in response to difficult economic times, like the Great Depression, or the need to meet increased student demand including the surge in enrollment in the 1960s. The challenges facing today’s public universities involve not only finances but also the need to use technology to respond to student demand for instructional services and to partner with both government and the private sector. This paper proposes a governance structure for public higher education systems that reinforces the strengths of traditional models while creating opportunities to streamline governance responsibilities in order to strengthen decision making Keywords: Higher Education Systems, Public Universities, Higher Education Finance, University Governance, and Higher Education Restructuring In an environment of diminished governmental support, leading public universities need to have the management capability to respond in an effective manner to increasing societal demands for its educational and research services. A critical factor in meeting these challenges is the manner in which these institutions are governed. The following discusses the historical evolution of various forms of public university governance that included the development of statewide governing boards, a number of case studies and recent reforms in states such as Virginia and Oregon and outlines a series of needed reforms. Large public flagship universities, in particular, need governance structures that have sufficient autonomy and flexibility to seek new or enhanced revenue sources and to efficiently manage their campuses. They need more freedom to determine enrollment and tuition policies than system-wide governance allows; some believe that individual governing boards, modeled on the boards of private colleges and universities, may provide more leverage for philanthropy. A. A Brief History of Governance in Public Higher Education Early forms of governance at public higher education institutions in the United States mirrored the structure in place at private universities. The composition of public boards reflected the political structures of individual states and the need to reflect certain aspects of the institution’s mission such as agriculture. This structure at private institutions emphasized highly independent institutional governing boards that operated with a substantial degree of autonomy. This structure was mirrored in states such as Michigan, Minnesota and California which granted their public universities constitutional autonomy. 1 James A. Hyatt - Senior Research Associate and Principal Investigator Vice Chancellor Emeritus and CFO; Associate Director Center for the Study of Higher Education University of California, Berkeley