Who owns universities: the case of Dartmouth

Today's WSJ has an article and an editorial on the threat to Dartmouth's unusual governance system where the alumni have real power on the board of trustees. The problem at Dartmouth is that reform-minded alums have gotten active on the board, threatening the usual university equilibrium – that is, dominance by academic elites. Thus Dartmouth is poised to quash the rebellion by transferring power to an internal committee. As the editorial says

institutions of higher learning now shy from the same oversight their faculties have demanded of the corporate world. . . . Former Harvard Dean Harry Lewis recently recounted the disposition of the Corporation during the Larry Summers debacle: "[It] was a leadership vacuum. . . . If Harvard were a public corporation . . . the shareholders would have been up in arms about the failure of the directors to care responsibly for the institution." It is not surprising that the "best practice" Dartmouth seeks to emulate is precisely the practice that enabled Harvard's expulsion of Mr. Summers.

At the time of the Summers ouster I said

Harvard, like other universities, is worker-controlled. The next Harvard president, unlike Summers, will be very aware of who’s the boss.

As he did with so many other governance issues, Henry Manne nailed this issue in an article 14 years ago, Comment on Peter Byrne's 'Academic Freedom and Political Neutrality,'43 J. Legal Educ. 340 (1993) about "[the] use of perpetual charitable trusts as the legal form of American private universities." Henry pointed out that the trust form was intended to lock control in those who would ensure that the institutions adhered to the religious precepts of their founders. But

As new generations of trustees emerged without the strong religious faith of their predecessors, the old, well-understood sense of direction of most schools was lost. Trustees had no particular agenda or conviction. The "customers" (students and their parents) had no power under the perpetual trust form. "administrators have no objectively identifiable goal--i.e., no interest that is distinctive and peculiar to administrators as such--that would allow them to occupy the role religionists once had." * * *

That leaves only one group for serious consideration: the faculty. And they were inspired to action by more than a process of elimination. The faculty was the only group that had a real self-interest in matters of university governance. Obviously, it is better to have a job where you are not monitored, no one oversees you, and no one enforces a particular doctrine that has to be taught. And certainly it is nicer if you can select your own colleagues, particularly if you can select people with whom you are intellectually and socially (and in years gone by religiously, racially, and by gender) compatible. So power in matters of real moment in university education devolved onto the faculty. There was in fact no one else around who even cared. The only ones who should have cared were the students and their parents, and they had no way whatever to make their concerns felt. Thus, the faculties evolved into real governors, or “owners” if you will, of the universities.

So, as many academics gripe about the problems of the separation of ownership and control in modern corporations and the power of managers rather than shareholders, they actively promote a governance model that puts power in a small elite and disenfranchises most of the university's stakeholders, including those who provide the funds.

A couple of years ago I wondered if there might be some viable alternative to this status quo.

[I]f for-profit or non-faculty-governed universities had significant advantages over the status quo, I'm confident our society and economic system are open enough to accommodate this change. Then why hasn't it happened? Possibly because the academic elites on which these institutions depend would refuse to work for such enterprises. But that's not a complete answer, because the elites don't provide the money, and can't ply their trade without it. So they have to persuade state governments not notably sympathetic to university non-athletes, private donors and alums to support them. The money people do continue their support because "labor" and "capital" are willing to compromise their objectives. The academic elites accept some constraints, and do not live in a complete worker paradise. * * *

Anyway, I'm still wondering:  is the current model of academic governance really the best possible approach despite the disenfranchisement of most stakeholders?  Or is it preserved by a combination of government regulation and powerful cartels (i.e., accreditation and licensing bodies)?  If the latter, I suspect the market will find a way of breaking through eventually and bringing us a for-profit alternative to the traditional university.

Comments

[TGGP]

Hey, this the same guy who was in a debate on corporate responsibility with Milton Friedman and John Mackey of Whole Foods!
http://www.reason.com/news/show/32239.html

[Harry Lewis]

It is flattering to be quoted by the WSJ editors as accurately describing the state of Harvard governance. But the full paragraph (page 262 of my book "Excellence Without a Soul") goes to the opposite conclusion about how that relates to the situation of our recent president:

"During most of the Summers years, the Corporation was a leadership vacuum. Its members were rarely heard from in public and rarely spoke to those who make the university run, except the president and his staff. If Harvard were a publicly held corporation in today’s climate of intensely scrutinized corporate governance, the shareholders would have been up in arms about the failure of the directors to care responsibly for the institution. In airing their concerns about Summers’s leadership, Harvard professors were playing the role of shareholders. In 2005, some Fellows who had joined the Corporation since Summers’s selection began to listen to what professors were telling them, and the Corporation ultimately played its proper fiduciary role."

The first part of the quotation above from Manne is exactly correct. There is no one creating ideals to which research universities can aspire, so they tend to have no goals, except to get better on the metrics, especially research metrics. That's not enough to create a mission for undergraduate education. We are dealing with young people; we need something more humane and something more developmental. A piece by me will appear in the next Chronicle of Higher Education suggesting that, at a minimum, we might go back to creating responsible citizens and responsible future leaders of society. Whether or not that is a sensible goal, what we need most, as I wrote in the Harvard Crimson a year ago, are "leaders who can again unite us—leaders whose selfless devotion to [the university] is apparent even in their clear-eyed criticisms." I don't know that much about the Dartmouth situation, but the interview with T. J. Rodgers that appears opposite the editorial is moving and saddening--and, from what I know from other Dartmouth alums, has the ring of truth to it about Dartmouth's leadership.