March 14, 2011

Trustees adopt changes in governance

Revisions meant to enhance performance, accountability, focus and engagement with strategic vision of university

The Johns Hopkins University board of trustees last week passed governance changes with the goal of ensuring that its arrangements are “best in class” and capable of protecting and nurturing the university’s academic missions in today’s rapidly changing environment.

The changes were made to enhance the board’s overall performance, level of accountability, and focus and engagement with the strategic vision of the university.

The reform process began 14 months ago with the creation of the Governance Initiative Steering Committee, an eight-member group that included board chair Pamela P. Flaherty, current trustees and one trustee emeritus. It was chaired by N. Anthony “Tony” Coles.

The committee set out to identify the board’s strengths and weaknesses and recommend any necessary alterations to its governance practices, structure and operation. One of the nation’s leading experts on higher education governance worked with the board to provide context and insight.

“We sought to understand best practices in board governance, and then to apply these standards to ourselves,” Flaherty said.

The full board of trustees participated in surveys and interviews and engaged in deep discussion, both in its entirety and in small groups, throughout the process.

In its final report, the Steering Committee recommended that the board reduce in size by nearly half within the next four years in order to streamline its efforts and fall in line with accepted board governance practices nationwide in both the private and nonprofit sectors. Specifically, the maximum number of members, not including ex officio trustees, will decrease from 65 to 35 by the year 2015.

In addition, the board voted to institute term limits, with an expectation that trustees will serve for a maximum of two six-year terms of service with the possibility of a third term in exceptional circumstances.

“This measure will give Johns Hopkins a group of individuals who are highly invested and very focused in taking the university to the next level,” Coles said. “We hope to create a new intensity of engagement on the part of the board to make sure its members can prioritize efforts and address the challenges we face to direct the university forward.”

The governance reforms also call for the board to prioritize a strategic vision for the 21st century. The board has already implemented several changes, such as the expansion of executive sessions and the establishment of a Student Life Committee and an External Affairs and Community Engagement Committee.

The Student Life Committee includes current undergraduate and graduate students from across the university divisions. The representatives, selected by the committee chair and the university provost, will not serve on the board but rather will interact with trustees through this board-level committee. The board’s young trustee position will be phased out.

“We believe that interaction with current students, as opposed to former ones, will give us a very contemporary sense of the issues confronting students on all campuses,” said Coles, who is president and CEO of Onyx Pharmaceuticals, and a Johns Hopkins alumnus who received his medical degree from Duke.

Drawing upon the university’s intellectual, social, economic, human and physical capital, the External Affairs and Community Engagement Committee will help develop strategies to strengthen the neighborhoods around Johns Hopkins’ campuses. It also will help the university shape strategic partnerships to address the broader challenges facing Baltimore City and the region. The committee has already had several meetings and has endorsed a comprehensive engagement strategy for the neighborhoods around the Homewood campus.

Also to be established is a council of emeriti to better tap the wisdom, experience and institutional knowledge of emeritus members of the board. Two current emeritus members will help steer the future actions and responsibilities of this council.

In addition, the committee called for the creation of an ad hoc subcommittee of the Trusteeship, Nominations and By-Laws Committee to address the process for selecting and renewing trustees. This ad hoc committee will report to the board in October.

In the past decade, U.S. universities and colleges have faced increased global competition, rising tuition and operating costs, and the shrinking of support from traditional sources, such as federal funding, according to Flaherty, who has served on the board since 1997 and was elected chair in June 2007.

Flaherty, who is a SAIS alumna and CEO and president of Citi Foundation, said that these external factors were part of the rationale for the board’s re-examining its structure and practices. She said the board also saw the need for greater accountability in the aftermath of conspicuous lapses by corporate and nonprofit boards, noting such high-profile scandals as those at WorldCom and Enron.

The report listed the many strengths of the university’s board of trustees, such as its dedication, commitment, congenial environment and quality of its membership.

Flaherty said that the trustees are committed to ensuring that the board is able to renew itself so that it is able to offer sound advice and counsel to the leadership of the university, and to discharge its fiduciary duties in the most effective manner.

The board, guided by outside expertise, will conduct a comprehensive self-examination at least once every five years.

“We have a tradition at Johns Hopkins to take something that is great and make sure it’s even better,” Flaherty said.