Fiscal Integrity with Kent Chabotar

Fiscal integrity means that the institution positions itself to be financially stable, financially reliable both in the short term and in the long term. And it's not just a balanced budget; it also means meeting your major requirements. In other words you can't balance the budget on the backs of the students by high tuition. You can't balance the budget on the backs of the faculty and staff with low salaries. You can't balance the budget on the backs of the endowment or foundation of the public university by over spending from endowment. And the one that's most often violated balancing the budget on the backs of the buildings by deferred maintenance. So it's long term financial stability but done in a way that doesn't kill the other priorities the institution has. The Board's role really starts when you hire the right President. The President's the Chief Executive Officer and the Board should really rely on the President or the Chancellor to take the lead in informing the Board about what the situation is with integrity as well as reacting to, reviewing and either approving or not approving what the President recommends. Where a Board gets in trouble is when they try to originate stuff on their own. Boards originate their stuff on their own particularly nowadays because of the financial crisis, they have an overdeveloped sense, many of them, not all, an overdeveloped sense of insecurity. And since they do have the ultimate fiduciary responsibility of the institution, and if the institution goes down, or changes in ways that are very negative the Board does have the final responsibility for that. So they don't want that to happen. And so it's like when you're in a car or something you're not familiar with you tend to hold the wheel very, very strongly when you're not sure where the road is or where the car's going. And that's what I'm seeing a lot of Boards doing now. There are some Boards which literally approve every single capital project that's a building project. It can range from replacing a roof, to building a wing on a building. And they will pre-approve every single of those projects. Now I'm not sure that's a good use of the Board's time. I think the Board should know what the capital projects are. I think the Board should obviously approve the amount to be spent, the total amount. And the Board should approve where the money's coming from. But the idea of a Board saying we approve the air conditioning system in Ajax Hall or we think you should re-floor the tile in that dormitory is an example of how Boards get over involved, because they are so nervous. When a Board's holding the wheel too tight the first responsibility is to educate the Board about its proper role in the governing of the institution. And that isn't necessarily a workshop it could be simply a sit down between the Executive Committee of the Board and the President and Chancellor and also his or her senior administration and talking through number one what's causing the Board to be this involved, some call it micro management and number two is what could the administration do to allay the Board's anxieties and three what kinds of fears are legitimate that both sides have to act on. And a conversation like that does a lot I think to allay the anxiety and to set the place back on the right course.