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The Executive Session: A Misunderstood Dimension of Governance

Tomorrow's Academy

Message Number: 
1739

The watchword for executive sessions is confidentiality. It has been called a “safe space” for board members to discuss matters openly. This approach will protect the person who raises an issue and serve to protect the reputation of any person whose name is discussed.

 

Folks:

The posting below looks at the role of the executive session in the workings of a university board of trustees. It is particularly relevant in times of increasingly hostile relationships between boards, faculty members, and administrators.It is from the book, How University Boards Work: A Guide for Trustees, Officers, and Leaders in Higher Education, by Robert A. Scott, president emeritus, Adelphi University. Published by Johns Hopkins University Press, Baltimore, MD. ©2018 Johns Hopkins University Press.  Winner of the 2019 Eric Hoffer Book Award. All rights reserved. Reprinted with permission.

Regards,

Rick Reis

reis@stanford.edu

UP NEXT: TBD  

 

Tomorrow’s Academy

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The Executive Session: A Misunderstood Dimension of Governance

 

The role and use of executive sessions are often misunderstood, even though there are legal standards to follow. For example, there are boards that misuse the executive session by taking decisions that are inappropriate for a closed meeting. In another case, a staff member was found to be tape recording executive sessions in order to assist in composing the Minutes, but had not told anyone, thus violating a fundamental purpose of the closed session -- confidentiality. 

The board should adopt a policy that states when and how to announce and conduct an executive session, how to identify the agenda, how to document and communicate the discussion, whether conference call meetings are approved, and when it is appropriate to include and exclude staff. The best practice is to include the chief executive in planning the session, to have an executive session noted on the agenda for every meeting, and to enter a closed session as a routine matter. In this way, when one is needed it will not arouse suspicions about a possible crisis.

The watchword for executive sessions is confidentiality. It has been called a “safe space” for board members to discuss matters openly. This approach will protect the person who raises an issue and serve to protect the reputation of any person whose name is discussed. Participants should be reminded about confidentiality; materials should be so marked; and access to materials should be limited to those with authority to see them. Violators should be penalized, perhaps even removed from the board.

Executive sessions are appropriate when the topics to be discussed include employee performance evaluations, employment contracts, collective bargaining, compensation, other personnel actions including alleged or improper activities, legal issues, and attorney consultations in order to maintain attorney-client privilege. In addition, executive sessions are appropriate for discussing crisis management, a financial audit with or without the independent auditor present, succession planning, future retirement plans for management, honorary degree candidates, and strategic issues such as an acquisition, a merger, or a “teach out” plan in the case of possible closure.

The executive session may be conducted at the beginning or the end of a formal board meeting. While it is common for the executive session to be held at the end of an open meeting, it is at times advantageous to hold the closed session at the beginning of the meeting. This can provide the board with confidential background information for an item to be discussed later at the open session. Following adoption of a motion to enter executive session, all but governing board members should leave unless invited to stay. It is normal practice for the chief executive to be included during the first part of the executive session.

The board should be transparent in deciding whether an executive session is warranted; whether a vote should be taken in executive session or delayed until the open session; and how information from the executive session will be communicated to those with a “need to know”. The chair should ensure that the discussion remains true to the stated agenda.

Executive sessions normally should take place in two segments. In the first, all staff except the president will leave the meeting room. This gives the board a confidential opportunity to ask the executive probing questions with no one else present. It also gives the executive a chance to discuss confidential personnel, financial, programming, and other matters with the board alone. The executive session can be an important element in the partnership formed between the board and the chief executive. 

The second segment of the executive session follows the executive’s departure from the meeting. This is the proper opportunity for the board to discuss the executive’s report and performance. During this session, the board should not take a decision without later explaining it to the executive. Good practice calls for the chair and the executive, following the meeting, to discuss the topics covered. From my own experience, I know that executives can become anxious when the second segment of the executive session lasts longer than expected. “What are they talking about?”, he or she may say silently or to a confidante. The board chair should take care that the executive session is not prolonged and does not contribute to an atmosphere of secrecy and cause unnecessary anxiety.

When the topics being discussed warrant, the executive should be invited back into the room with the board in order to answer questions and provide needed clarification. The use of the executive session should not serve to undermine the relationship between the board and the executive, even unintentionally.

Before a board can enter executive session, it should determine if a quorum is present so that it can convene an official meeting. Attendance for determining a quorum should be defined in the By-Laws. The By-Laws also should specify whether board meetings are covered by an “Open Meeting” law. These laws mandate that official notices of meetings must be published within a certain time period and that the meetings must be open to the public for attendance purposes. This applies mostly to public colleges and universities.

At all meetings of a board, the chair must take steps to “open” a meeting, whether the public is in attendance or not, before calling for a motion to enter “executive session”. The motion must be seconded, may be debated, and must be adopted by a majority of the board. A motion also is required to close the executive session, and to enter or reenter a public session. Such motions should be recorded in the Minutes. The board, under the leadership of the chair, should determine whether a regularly scheduled executive session or a specially convened session would be more expeditious and still fulfill oversight responsibilities.

A common misunderstanding about executive sessions is whether Minutes should be taken and what form they should take. For the first segment, the executive can draft a brief summary of the discussion and any actions taken and review it with the board chair after the meeting. For the second segment, the board chair can provide a brief summary of the discussion and any actions taken. Both sets of brief notes should be voted on by the board at the next executive session and filed with the board’s confidential records. The reason for the executive session should be documented briefly in the general meeting Minutes.

The reasons for brevity in executive session Minutes are two-fold. First, board members want the assurance of confidentiality in discussing personnel and other sensitive topics. Board members should feel that they are able speak freely as well as responsibly. Second, there may be a future legal proceeding and deposition requesting the records of confidential deliberations. Detailed Minutes of executive sessions could be misinterpreted and used to set one board member against another.

The role of the board chair is as essential in executive sessions as it is in public meetings. At a university where a representative of the local faculty is a full voting member of the board, the faculty member called for an executive session without the president present. The faculty member then proceeded to abuse this privilege by criticizing the president and reciting faculty complaints about the administration. 

The faculty representative violated the required trustee duties of care, obedience, and loyalty by placing constituent issues above board responsibilities. (This would be true for alumni representatives as well.) The board chair should have called the faculty member trustee out of order and invited the president back into the meeting to hear the complaints and, perhaps, respond to them. 

In another case, a president accidentally discovered that the board’s assistant secretary had been tape recording executive sessions in order to assist in composing the Minutes, but had not told anyone. There are several problems with this. First, the purpose of an executive session is for the board to discuss confidential matters without anyone else’s knowledge or participation. Second, board members would not be forthcoming if they knew that staff members were able to “listen in” on their assessments of people and strategies. As stated above, Minutes of executive sessions are to be minimal. Tape recordings would be a "gold mine” for a plaintiff.

In response to the revelations of sexual abuse of female gymnasts at Michigan State, questions were asked about who knew what, when, and how. People correctly wondered what the board of such a large institution could have known about the incidents. Fair question. Good governance requires complete and honest communication between senior leadership and the board, even when the university is large and the news is not good. 

I wondered what the board’s Audit Committee and audit firm discussed about the allegations in the face of the University’s settlement of two earlier federal Title IX investigations, and what was reported to the full board in executive session. Did a board member or firm representative ask, “What else should we know?” “What other complaints should we know about?”  Did they refer to the sexual abuse scandal at Penn State and ask, “Could anything like this happen here? Has it? What can we learn from their experience?” 

There are equally difficult issues at colleges and universities of every type and size. The point is that the trustees of every institution are responsible, as David Riesman said, for protecting the institution of the future from the actions of the present. The questions posed above, some of which may have been asked and answered adequately, are the kind that board members should ask in executive session in order to protect the college or university of the future. Unfortunately, such questions are often either not asked or are rebuffed.

For example, a university trustee reported to me that the president of his institution objected to his questions about enrollment and finances even in executive sessions. All he wanted, according to him, was to know more about the perceived disconnect between what he was being asked to approve and what he had read about in the higher education press. He wanted to know the assumptions undergirding the president’s projections, which is what a trustee should want to know and which are perfectly suited for executive session. 

In addition to using the executive session to ask questions about assumptions and impediments, trustees should also use executive sessions to ask about possible unintended consequences and potential new ways of looking at issues. This is not to suggest that board members should propose prescriptions; they should not. But members should ask questions and expect answers. It is the role of the board chair to ensure that robust discussions of proposals, alternatives, and implications take place in executive session before calling for a vote in open session. 

The cases described above, and many others, should be used in board orientation sessions.

The board’s role is to monitor and assure the alignment of mission, goals, priorities, resource acquisition and allocation, strategies, and results, in partnership with the president and in a culture of shared governance. This requires trust, and trust requires full and open communication, including the asking and answering of questions in open and closed sessions.

Executive sessions are an important tool in governance and in the president-board relationship, but must be understood and used purposely and wisely.