Harvard University in December announced that it will reform its governing board for the first time since 1650.
The updates address criticisms of the board’s effectiveness that followed huge endowment losses suffered during the financial crisis.
Harvard’s unique bicameral governing structure consists of the Harvard Corporation, which manages finances and business affairs, and the 30-member Board of Overseers, which sets the university’s academic policies and practices.
The proposed changes — the culmination of a yearlong review process that began in fall 2009 — will nearly double the size of the current seven-member Harvard Corporation to 13, impose formal term limits and create three committees focusing on issues of finance, capital planning and governance.
Experts agree the reforms are overdue and will bring Harvard in line with governance practices at other colleges.
“Harvard was quite anomalous, quite an exception with regard to size and with regard to the frequency at which the corporation met,” Richard Chait, a professor at Harvard’s Graduate School of Education who advised the review committee, told the Daily. “The changes probably reduced the degree of divergence from the norm and made Harvard more similar, not less similar, to the way other universities operate.”
Merrill Schwartz, director of research at the Association of Governing Boards of Universities and Colleges (AGB), agreed that the changes were in line with common practices in higher education governance and emphasized Harvard’s uniqueness
“Most [colleges] don’t have the bicameral structure that Harvard University has,” she told the Daily. “It is interesting that they still need to make this change now and adopt some of the practices that are more common at other colleges and universities.”
Data from the AGB indicates that average board size in 2010 among surveyed colleges and universities was 29, more than half of institutions surveyed imposed term limits on board members and most governing boards reported an average of eight standing committees.
Tufts’ Board of Trustees, in comparison, is required by its bylaws to have a minimum of 28 and a maximum of 41 members, has term limits for trustees and comprises seven standing committees.
“The Tufts governance model is one that is highly regarded by the members of the AGB,” Tufts’ Secretary of the Corporation Paul Tringale (LA ’82) said in an e-mail to the Daily. “Board size and composition practices vary depending on each institution’s needs and its history. The size of our board suits us well.”
The review of Harvard’s board was preceded by questions and concerns raised by critics about the effectiveness and performance of Harvard’s governance structures in light of the impact of the financial crisis.
One of these critics, Harvard Professor of Computer Science and former dean of Harvard College Harry Lewis, co-authored an opinion piece in the Boston Globe criticizing the Corporation’s secrecy and lack of accountability.
“Harvard managed to lose 13 billion dollars in one year,” Lewis told the Daily. “This raises the question as to whether the legal fiduciaries of the university were doing their job well.”
Chait said that the review process was an appropriate response to recent events.
“It was a very healthy self-examination, to ask the question of whether or not the corporation which had existed in this form more or less for the last 360 years served the university’s interests for the foreseeable future and whether this was the time for change,” he said. “I think most importantly the corporation came to realize more clearly what work they needed to do and how they could make a distinctive contribution to the university’s future.”
Chait, Schwartz and Lewis all agreed that the changes marked a significant step toward progress.
Chait explained that increasing the size of the Corporation would grant it the resources it needs to fulfill its duties.
“I think any time you double capacity, that provides an opportunity to add people to the board who have a broader spectrum of expertise, skills and perspectives, and that would leave the board better equipped to address financial issues, issues of capabilities and global markets in higher education,” he said.
Schwartz added that the creation of standing committees also better facilitates the board’s operations given the complexity of a university’s process.
“Being able to divide the work into committees allows members to specialize and gain expertise in certain areas.”
On the extensive time lapse between the last major changes to the Harvard Corporation, Lewis said that Harvard’s achievements overshadowed the problems.
“No one wants to tamper with success and Harvard was very strong…both financially and academically, and naturally there was not the same kind of incentive to change things,” he said. “But when the financial losses were that severe, combined with a fairly rocky leadership transition in previous years, I expect that I was not the only alumnus that expressed worries.”
Schwartz emphasized the importance of regularly evaluating governing boards’ effectiveness.
Tufts evaluates itself annually, as well as after each board meeting, according to Tringale.
“We have put in place a series of processes to ensure that our governance best meets the needs of the institution,” he said. “There is a regular, intensive review process of the governance structure that the trustees conduct and from time to time ask third parties to assist with assessment.”
Tringale also reflected on the significance of Harvard’s changes for peer institutions.
“Harvard is obviously an institution that is held in high esteem and people watch their movements very closely,” he said. “Because of Harvard’s very public review of their board structure, the higher education community will no doubt take note of the process they used and the resulting changes reported.”
Schwartz noted that Harvard’s one-of-a-kind structure limited the influence of these announced changes.
“It’s interesting when Harvard does anything, but Harvard has a very unique system of governance so I don’t see it as particularly being a lesson for most colleges and universities,” she said.