By Ross A. Mugler
The risks facing higher education today are impossible to ignore. Whether from political intrusion, financial instability, shrinking enrollments, or increasingly complex digital threats, colleges and universities are operating amid great pressure. But the danger that most often determines whether an institution will weather storms or succumb to them is a systemic one that often flies under the radar—the risk of governance failure.
Governance failures typically do not make the news until there is a crisis. Crises often stem from weak governance systems that not only add risk but also amplify all risks. Ineffectual boards can turn otherwise manageable challenges into existential crises that threaten an institution’s very foundation. Effective boards, on the other hand, anticipate, prepare for, and navigate challenges and opportunities with strategic focus and good judgment.
Governance risk often doesn’t announce itself, however. Instead, it reveals itself through several frequently overlooked indicators. Trustees unaware or uncertain of their fiduciary duties, boards lacking key expertise, or strained relationships with presidents due to mistrust and ineffective communication are signals. What starts as a small crack in the governance dam can widen quickly under pressure.
Sometimes problems manifest as micromanagement that undermines leadership. Other times, they manifest as paralysis and an unwillingness to act even as risks mount. Increasingly, governance risk shows up by succumbing to undue interference, when, for example, ideological or donor influence is allowed to distort the pursuit of institutional mission and priorities. When governance weakens, every other risk—from financial to reputational—intensifies.
For boards and presidents seeking to better understand fiduciary responsibilities, Association of Governing Boards of Universities and Colleges (AGB) has resources that highlight1 (AGB.org/fiduciary) how care, loyalty, and obedience come to life in practice, and how fulfilling these duties can prevent governance breakdowns.
“The best boards consistently evaluate their governance effectiveness and invest in their own education because their institution’s health depends on it.”
Strengthening the Foundation
Good governance is risk mitigation in its purest form. The best boards consistently evaluate their governance effectiveness and invest in their own education because their institution’s health depends on it. They expect every trustee to understand and embody the fiduciary duties of care, loyalty, and obedience. They also expect their trustees to understand their authority and the boundaries between governance and management. Such boards value diverse perspectives that challenge assumptions and prevent costly blind spots, and they nurture genuine partnerships with presidents that are built on trust and shared commitment to the mission. Finally, they understand that the alignment between the board and chief executive is the most powerful stabilizer an institution can have.
To assist trustees in pursuing these best practices, AGB provides an essential guide2 (AGB.org/principles) that offers a framework for aligning individual and collective board behavior with institutional success.
Effective boards do not treat risk oversight as a once-a-year exercise. Rather they:
weave it into their regular deliberations, linking risk awareness to strategic priorities and decision-making.
plan for leadership transitions and the next generation of trustees.
actively work to improve governance; because they know that when governance fails, even minor challenges can quickly become major catastrophes.
Boards can deepen readiness through learning opportunities3 (AGB.org/crisis) that focus on specific steps to take in order to build out crisis-ready governance practices. This can help provide a blueprint for proactive actions that boards can take to anticipate disruption and lead with confidence.
Governance is the lens through which every risk is managed. It dictates how institutions respond to crises, how they speak to their communities, and how they protect their mission under strain. When governance is strong, risk isn’t just contained; it is converted into possibility and opportunity.
As the nation’s higher education sector faces relentless challenges, its future will be determined not by the number of risks that institutions face but by the effectiveness and strength of the governance that leads them.
"When governance is strong, risk isn’t just contained; it is converted into possibility and opportunity."
https://agb.org/podcast/fiduciary-duties/
https://agb.org/product/principles-of-trusteeship/
https://www.youtube.com/watch?v=kYWQXl988vA