The posting below explores issues related to a search for an interim president, something that has taken on greater urgency during these pandemic times. It is by Robert A. Scott, President Emeritus and University Professor Emeritus, Adelphi University, Garden City, NY and is drawn from his book, How University Boards Work, Johns Hopkins Press, 2018. Copyright 2021 Robert A. Scott. All rights reserved. Reprinted with permission.
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The Interim President’s Role
Last year, institutions of higher education in the U.S. saw freshman enrollment fall by 16% and overall enrollment decline by over 560,000 students. Budget deficits totaled more than $120 billion and over 500,000 employees lost their jobs. Many others had their salaries cut or experienced furloughs. Colleges and universities have eliminated degree programs and departments. Some have suspended admission to doctoral programs.
Furthermore, it is estimated that up to one-third of colleges are at risk of closing or needing to merge. This is especially true for some of the 800 private colleges with under 1,000 students that are in less populated areas, are highly dependent on tuition, and have little public recognition beyond their region. While not as many colleges have closed as predicted, these conditions have contributed to some abrupt exits from the President’s Office.
The turnover in college and university presidencies was at first stalled and then accelerated by the COVID pandemic. The average length of service was already declining, but some presidents delayed their departure due to the uncertain challenges of the health crisis and a desire not to disrupt campus plans. Later in 2020, the number of retirements increased, with some citing the burdens of working too long and too hard. One student of the presidency wrote, “They feel as if they have put in 24 months of work over the last four calendar months and know this pace will continue.”
Whatever the reason for turnover, the need to find a new leader is a significant responsibility of a board of trustees. They need to determine whether they will search for a permanent successor or appoint an interim leader for a specified period of time. If they decide on an interim president, will it be someone from the campus or from outside? Does the board want someone to “calm the waters,” increase enrollment and net tuition revenue, make major changes in the academic program or cost structure, repair political or reputational damage, or all of the above? What will the board do to maintain institutional memory through the senior executive team? What will the board do to ensure that a new president does not think that institutional history starts when he or she enters the office?
At times, it makes sense to find an interim successor when the previous president was a long-term, successful, and well-respected leader. The interim period will allow the campus and alumni time to separate from the previous president. At other times, it makes sense to find an interim leader when significant repair work needs to be done and the change agent agrees not to be a candidate for the permanent position. The board needs to consider the characteristics deemed important in the next leader, the culture of the institution into which a new leader will be introduced, the consequences desired, and the period of time required for attaining stability.
Often, a board seeks an interim president for a year, but the work to be done will take longer. Also, the interim leader who starts in July will find that few people will listen if the board plans to start a search for a permanent president in October. While the one-year interim has been the model, many campuses are finding that more time is needed for substantive actions to be taken and the way smoothed for transition to a permanent president.
First, though, a board should determine whether it is prepared for the decision, the search, and the onboarding of a new president. After all, potential candidates for an interim or normal appointment will examine the board as well as be subject to examination. Are the By-Laws up to date; is the board organized effectively; are Board members oriented to their duties of care, loyalty, and obedience; does the board provide training and information for best practices in good governance?
An interim president who is not a contender for the permanent spot and is given sufficient time, even two to three years, can undertake the challenging work of leadership and management and also help the board while it works on issues of governance.
Perhaps some examples will illustrate these points. At one institution seeking an interim president from beyond its campus, the board had borrowed nearly $100 million in order to renovate facilities and build new student-centered structures in order to increase enrollment. It did not understand why overall enrollment had fallen, transfers in had declined, and transfers out had increased. It did not realize that the highly touted general education program required 15-20% more credits than necessary for graduation. This made it difficult for enrolled students to change majors or for those transferring in to graduate in four years, thus costing families more money. As a consequence, both total enrollment and net revenue had fallen.
A sectarian institution, the enrollment management team could not explain why they did not recruit at nearby secondary schools affiliated with the religious order.
Without the desired enrollment to help pay the borrowing costs, the board arranged to sell a large portion of the debt to a newly formed company founded by two board members and an outsider. When asked about the review process related to this sale, the board chair, a retired New York City financier, proclaimed that they followed all the rules. However, when it was pointed out that, according to the college’s By-Laws, there was no independent audit committee, he blanched.
In this case, the board needed to update its own policies and procedures for audit, finance, academic affairs, admissions, and conflicts of interest before deciding on the characteristics of an interim president and the time period for the appointment.
In another case, a university borrowed almost 30% from its endowment to cover operating shortfalls. When asked about the role of the Audit Committee in undertaking this questionable action, the chair assured the consultant that all was done properly. The chair of the committee then replied to a question stating that he had chaired the committee for 24 years and had close relations with the audit firm. Upon examination, the board By-Laws needed updating to ensure term limits and committee rotation as part of board development. The Board also needed to be better prepared for meetings and question projections that seemed unreasonable.
Regrettably, the board had not considered its large landholdings as an asset to be leveraged and had not studied whether it might seek strategic partnerships with either or both of its nearby private college neighbors. The “strategic plan” was not very strategic.
In both of the cases cited above, the boards were neither well-informed nor sufficiently inquisitive about the academic and financial circumstances of the institutions they held in trust. The board members were devoted but complaisant, even in the face of dire facts. They seemed to be unfamiliar with the details of their own institution and with higher education in general as reported in the popular and higher education press.
Fortunately, there are resources to assist boards in these circumstances. The Association for Governing Boards Search service and the Registry for College and University Presidents help institutions assess the need for interim leadership and the qualities necessary for positive movement forward.
Of course, the best alternative is to be informed and up to date on the circumstances and context for the institution. Board members should be prepared for meetings and not act in an impromptu fashion. They should come with questions, not prescriptions. The mandate for board members is for participation, not domination in discussions. Finally, boards should work on its partnership in governance with the president and the faculty, with each party promising trust and transparency without suspicion or surprises. The need for an emergency, outside interim leader should be a rare, not a common, occurrence.