Should alumni run Australia’s universities?

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Australian universities face conflicting pressures from a variety of sources – students, government, business and staff. So how should they be governed to weave their way through the conflicting interests and maintain the long-term interests of the institution?

One answer comes from the US. Let the alumni run the university by controlling the University Council. The alumni of a University have a strong interest in maintaining the quality of the university. The alumni qualifications, by definition, are from the university and the value of their degrees depends on the on-going quality of the university. So letting the alumni control University Council means that the interests of the Council and the long-term interests of the university will be aligned. This will empower good vice-chancellors.

An article on this is available here. But some numbers worth noting:

Today, 19 of the top 20 American universities in US News & World Report’s much-watched rankings are controlled by alumni (defined as 50 per cent or more representation on the Board of Trustees). The only exception, the California Institute of Technology, has a board with 40 per cent alumni representation. Of the top five, three (Harvard, Yale, and Columbia) are managed entirely by alumni, and two (Princeton and Stanford) are under 90 per cent alumni control. Alumni run the show even at public institutions such as Purdue (90 per cent) and Michigan (63 per cent). On average, alumni make up 63 per cent of the boards of the top 100 US universities, both public and private.

  Given that these same universities tend to be the best in the world on any rankings, something must be going right.

9 Responses to "Should alumni run Australia’s universities?"
  1. Identification with university is very strong in the States. They have sports teams and raise huge amounts of money via alumni. Here, alumni money is a pittance and university identity is weak. I suspect an important reason for that is lower mobility here in Australia giving rise to greater identification with competing entities like high schools, local churches, and communities.
    Still, the question you really raise is what determines university council appointments in Australia. Its a bit murky to me, but I thought they are partially appointed by VCs and partially by the local education ministers, with some minimal input from staff and students, no?

  2. Yeah, maintaining control of an institution by elevating insiders who have come up through the ranks has worked exceptionally well for the Roman Catholic Church.

    MIT was not mentioned by Stephen. It came to mind because of its OpenCourseWare initiative, which a number of other universities have picked up, so I wondered how inbred its governance structure was.

    Turns out that while a majority of alumni exercise strategic executive control, it has had, since 1875, a structure of (currently 30) visiting committees composed of “distinguished achievers in the disciplines of the department being visited. As such, they offer a valuable outside perspective and help to maintain a close relationship between academic procedure and professional practice.” http://web.mit.edu/fnl/volume/185/mead.html

    This seems an interesting model as it introduces opportunity for the creative destruction that I suspect that universities today sorely need

  3. The answer differs depending on whether you ask whether “a university should be run by its alumni” or “Australia’s universities should be run by their alumni”. There may be a fallacy of composition.

    The analogy that immediately came to mind was the experience of Yugoslavian collectives. Each collective could sell in a market, but proceeds were even divided amongst participants. You could bring new members in, but this would only happen if their marginal product/revenue was higher than the average product of the collective. This was good for participants, but there were many opportunities where marginal revenue in excess of marginal cost was foregone, something that became apparent on a macro scale.

    In this instance, the product is prestige. The alumni have an incentive to make admission as hard as possible, so the average quality of students is increased. This will come at the expense of students that could easily be taught at the same quality (i.e more students wouldn’t cause diseconomies of scale), and whom would be a boon to society at large. It may even reduce the amount of education going on, because the universities are selecting for clay that is already moulded.

    The US System works well for the Ivies, but has it worked for the US?

    And then imagine the path dependencies. Say you have a university that is slightly better in law or engineering than business. The law graduates would earn more and be more prestigious. Through clout or donations they dominate the alumni governance. Yet imagine people take into account the school rather than the university as a whole when determining prestige. The law alumni now have an incentive to make the business faculty a diploma mill, shovelling out cheaply provided degrees, and using the revenue to bolster an elite in the law faculty. Now the law graduates dominate the alumni even more, because they got a better education. The problem intensifies.

  4. Paul. From the skills.vic.gov.au website:

    “There are four types of members that making up a university council’s total membership of between 14-21 members. viz.:
    • “appointed members” (i.e. all GIC [Governor in Council] appointed positions);
    • “official members” (i.e. the Chancellor, Vice-Chancellor, and president of the academic board);
    • 4“selected members” (i.e. representatives elected by staff and student associations); and
    • “additional members” (i.e. members appointed by the Council itself).”

    So Victorian University Councils are made up of government appointees, senior University admin, and 4 staff/student reps. So at present there appears to be no alumni representation unless the government (or the Council itself) invites some.

    Richard – the issue is changing the current incentives for universities which, in my opinion, are too driven by short term financial pressures (from government under-funding and over-reliance on overseas student income) which undermine the incentives to maintain quality. It is exactly because the incentives of alumni are to maintain quality and standards that they provide a valuable source of countervailing power to other ‘pressure groups’ within Universities.

  5. Alumni in the US may control university councils but the universities are run by the Professors.
    At Purdue Professors ran everything. That, is where Australia is different. And that is an aspect that needs changing in Australia.

  6. The interests of the alumni don’t completely align with the interests of the University. The most obvious unfortunate manifestation of this is in the US practice of “Legacy Admissions”, where the family of alumni receive preferential admission.

  7. Well, certainly alumnae/i have well-alligned incentives: the value of their diploma is at stake well after they leave the university, something my alma mater reminds me of all the time. So, yes, they should have significant representation. But alumnae/i do not guarantee good stewardship, as — may be most prominently — the recent developments at the University of Virginia have made very clear. Kris Olds has written about the causes of the failure of legacy governance and the following is a very useful reading (with lots of useful links): http://www.insidehighered.com/blogs/globalhighered/failure-legacy-governance-university-virginia

    Equally important, it seems to me, is indeed faculty and student representation (e.g., at Harvard faculty have significant representation, almost half if I recall correctly). You do not want to have faculty (or the profs) alone to run the show, though, as rabee seems to advocate.

    The trick is to have a board that represents key stake-holders (alumnae/i,faculty, students, the government, etc.) and, most importantly, is not captured by management. I think these are the lessons that come out of various recent scandals (e.g., quite dramatically, Penn State. It was, as the Freeh report (http://thefreehreportonpsu.com/) has made abundantly clear the fact that the board was captured that led to the developments there.)

    In this respect all the lessons taught in Corporate Finance 101 apply in full.

  8. The Victorian government has introduced legislation to remove the elected student and staff representatives. Alumni reps when they existed (not for years in Victoria) where often pretty bad – people with too much time on their hands.

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