The Will to be Average
Sunday, November 18, 2007
By Joseph Asch
Among all the distortions in the current dispute about the expansion of Dartmouth’s Board of Trustees, the most egregious is the assertion that the Board’s Governance Committee conducted a “best practices” study of other institutions of higher learning.
As a consultant at Bain & Company, I was involved in many such analyses; we called them “best developed practices” reviews, or BDP’s. The goal of a BDP was to understand which companies in an industry were most successful in a particular area and then ascertain the specific reasons for their success.
For example, we might have sought to find out which sales force in an industry had the highest dollar sales per sales rep, and then we would study the reasons for that company’s success. Or we might determine which successful business had the leanest head office, and see how that company could succeed despite (or because of?) a pared-down administrative staff. In finding high-achieving models, we could learn lessons from their successful experience.
The BDP provided a base for our recommendations to clients, and from that foundation we added other suggestions for innovation. Our ultimate goal was precedent-setting excellence, something only achievable once you had done your homework regarding existing standards.
In contrast to this methodology, Dartmouth’s Governance Committee looked at 31 “peer institutions” of varying calibers—universities and colleges ranging from Harvard to Vanderbilt (U.S. News rank: #19), the University of Rochester (#35), and Case Western (#41)—without any explanation given for the inclusion of certain schools in the study and the omission of others. Then the Committee simply computed the numerical averages concerning governance practices at these schools.
No determination was made as to which school’s Boards consistently made successful policy decisions regarding the academic and financial health of their institutions. And no thought was given to understanding which schools kept their alumni involved in the school’s affairs, or had high levels of alumni donations, or received extensive alumni support in recruiting students or athletes.
The only analytical strategy seemed to be a resolute effort to find the raw averages of various aspects of the trustee boards at these institutions.
Let’s look at an easy example of this type of thinking. Analyze the following question: should New Hampshire have a sales tax?
If we look at the average sales tax policies of other states, we would see that New Hampshire is far off the average: 45 out of 50 states have sales taxes. But would such a review of other states’ policies lead to a recommendation that New Hampshire be like the great majority of other states and institute a sales tax?
Of course not. At that point we would determine whether our state would still be better off without a tax; to do so, we would have to measure any number of aspects of the economies and social organization of New Hampshire and other states.
Yet the Governance committee did not take this second necessary step in looking at our 31 supposed peers. Why not?
The reason could not have been that the Committee’s members did not understand how to do a real BDP study. After all, one of the Committee’s members, Trustee John Donahoe ‘82, had himself been a partner at Bain & Company.
To my mind, the real goal of the Government Committee’s “analysis” was not to arrive at a rational conclusion; rather, the Committee sought only to backstop a predetermined policy decision.
Even before the study was done, any informed observer knew that Dartmouth had the highest level of alumni participation in the staffing of its Board. So the predictable result of choosing to compute the average of a large number of schools could only be to ratify the Trustees’ decision to pack the Board with new Charter Trustees.
Beyond their use of averages in support of their decision, the Governance Committee put forward three other justifications: the need for diversity on the Board; the requirement of a larger Board in order to choose trustees of different professional backgrounds; and the trauma of “divisive” elections. None of these arguments holds up even to a cursory analysis.
The composition of the current Charter Trustees and Alumni Trustees is telling: today’s eight Charter Trustees consists of six white men, an African-American woman, and a white woman.
In contrast, the Alumni Trustees include an African-American, a Latino-American, an Asian-American, and a woman.
I think that we can safely conclude that alumni voters prize diversity far more than the Jim-Wright-dominated Governance Committee does when it picks Charter Trustees.
As regards the Board’s need for trustees from a broad spectrum of backgrounds, the Charter and non-petition-Alumni Trustees are a remarkably uniform lot: seven of the twelve are money managers or deal makers, three are managers of large corporations, one is a senior lawyer, and one is a doctor.
However the petition trustees include an entrepreneur who has founded a multi-billion dollar corporation; a public intellectual and former speechwriter to the President of the United States; and two tenured faculty members.
It is extraordinary that prior to the election of Alumni Trustees Todd Zywicki and Steven Smith, both tenured law professors, Dartmouth’s Board had no members at all with experience as a full-time faculty member or as a senior educational administrator. This posture makes as little sense as a corporate Board of Directors that has no business executives on it.
At Harvard, two of the six non-ex-officio members of the governing Corporation are faculty members at other schools, as are 10 of the 30 members of its Board of Overseers.
At Yale, three members of the 18-person governing Corporation are faculty members or senior administrators at other institutions, and at Princeton, seven of the 38 member of the Board are full-time educators.
In looking at the present Dartmouth Board, someone more suspicious than this writer might conclude that while Jim Wright talks about experiential diversity, he consciously seeks to keep individuals with direct experience in education from serving on his Board.
Finally, the Governance Committee’s concern about the divisiveness of elections masks the fact that recent elections have actually debated ideas and involved the alumni in Dartmouth’s affairs in an unprecedented and positive way. These races have shone a welcome and necessary spotlight on many of Dartmouth’s institutional weaknesses.
Gone are the days of shallow “look at my great resumé!” beauty contests. To run in a trustee election today, candidates need to show that they know something about the current life of the College.
Clearly Stephen Smith hit the books in forming opinions about today’s Dartmouth, an effort that the other candidates seemed unwilling to make. And just as clearly, recent elections show that alumni voters seem to support candidates who have more than cursory knowledge about the institution that they are supposed to lead.
If having informed trustees on the Board is the result of divisiveness, let’s have more of it!
When you step back to reflect, it is embarrassingly obvious that the only real reason that the Governance Committee desires to inflate the overall size of Dartmouth’s Board with new Charter Trustees is that Jim Wright’s supporters have lost six straight alumni votes.
This point is especially evident when you consider that today the four educational institutions with the smallest governing boards are Harvard, Dartmouth, Yale and Amherst.
Additionally, as the Governance Committee itself noted, the schools with the highest percentage of alumni-chosen trustees are Dartmouth, Duke, Princeton and Yale.
Pretty good company to be in, don’t you think? In fact, these are the schools that should constitute the peer group to which the Governance Committee looks for guidance, not a hodgepodge of 31 varied colleges and universities.
Beyond these observations, if the Board really needed more trustees after all these years, it could easily have added an equal number of Charter and Alumni Trustees, as the Board announced that it would do in 2003, when it chose to maintain parity in gradually expanding the Board to 22 members.
Memorandum to the Board: Please be honest about your aims and thorough in the justifications for your decisions. Dartmouth’s alumni deserve more than weak ex post facto rationalizations for political moves.
However, if you are actually sincere in your goal of being guided by the practices of 31 of our “peer institutions,” you should realize that following the average choices of other schools will only lead to Dartmouth becoming an average school herself n
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