Good Governance can Mitigate Board Liability in Higher Education
As a follow-up to our article "Boards are in the Spotlight," this week's news hits home about the importance of governance and transparency and its impacts on Boards and Fiduciaries. This week's post shares news and insights focusing on legal disputes amongst board members and compliance concerns surrounding state open meeting laws.
Trustee Lawsuits
Penn State trustee Anthony Lubrano has alleged that the board retaliated against him for his public comments on transparency and governance issues. As a result, Lubrano filed a lawsuit last month, claiming the board wished to silence him, and launched a retaliatory investigation following his media interviews. According to Inside HigherEd and the lawsuit, Lubrano aired his concerns "to provide transparency on his views to university stakeholders" because he believes "transparency is essential" for the Board of Trustees to function properly."
This lawsuit represents the second legal action filed by a trustee against Penn State. The previous lawsuit was filed in July 2024 by Barry Fenchak. This lawsuit focused on transparency and its impact on the management of the University's endowment.
In that suit, Fenchak alleged that certain trustees told him he would "never be given that information" regarding endowment management fees and discouraged him from asking questions. Fenchak raised concerns that vital information needed for decision-making was either unavailable or denied, which he believes undermines the fiduciary duty of fiscal responsibility for the University.
Open Meetings
The news does not stop there. The media further scrutinized the internal board operations and its compliance with Pennsylvania's open meeting laws. Legal challenges arose regarding closed meetings related to the naming of the football field and a $700 million renovation of Beaver Stadium. Spotlight PA, an independent and nonpartisan newsroom, filed a lawsuit over alleged violations of open meetings law.
These recent lawsuits showcase that governance and transparency are significant risks in higher education. Our recent HigherEdRisk poll further demonstrates that the LinkedIn higher education community agrees and is looking for strategies to address regulatory and compliance challenges.
Bottom Line: Transparency and good governance can reduce risk
Emphasizing and embracing the value of transparency is essential not only for Boards and Fiduciaries but also for the entire leadership circles in higher education. Good governance is the foundation needed to mitigate the financial, legal, operational, and reputational risks which can all significantly impact an institution's reputation and ultimately, the trust of students, faculty, staff and alumni.
I want to finish off with this quote that sums up this post. Wise words!
"From my perspective, there are few issues more strategic than ensuring that our governing Board understands its rights and responsibilities as it relates to our institution."- Laurie M. Joyner, President of Wittenberg University in Springfield, Ohio.
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