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ERIC Number: ED562078
Record Type: Non-Journal
Publication Date: 2015
Pages: 80
Abstractor: ERIC
Reference Count: N/A
ISBN: 978-0-926508-33-0
ISSN: N/A
The Board's Role in Financial Oversight. AGB Board Essentials Series
Krawitz, Natalie
Association of Governing Boards of Universities and Colleges
An often-volatile economy, changing demographics, and technological innovations in educational delivery are among the dramatic changes across higher education that have forced boards and institutions to question the viability of the existing business model. Flat or declining state support in real terms, lower investment returns in some years, shifts in federal support, and pressure to control tuition costs have forced institutions to find more efficient and effective ways to operate without compromising quality. While financial assets are not the only assets requiring board oversight, board members have a responsibility to understand the institution's finances. This includes understanding how board and management decisions affect finances and, in turn, how the institution's finances affect those decisions. To assist boards members, AGB has provided best practices that constitute important underlying principles such as: (1) A clearly stated institutional mission--accompanied by statements of vision, goals, and priorities--creates the foundation for exercising financial responsibility; (2) All board members should have a basic understanding of the financial condition of their institution to effectively exercise their fiduciary responsibilities; (3) The financial condition of an institution should not be the exclusive knowledge of a handful of board members and senior administrators; (4) The board is responsible for ensuring that financial decision-making aligns with strategic options; and (5) "Noses in; fingers out."--The board and senior administrators must work as partners. The relationship should be built on understanding, trust, mutual respect, and an appreciation of the other's responsibilities for institutional governance. This publication will help board members understand the financial context in which colleges and universities operate, which is critical to a board's ability to carry out its fiduciary responsibilities.
Association of Governing Boards of Universities and Colleges. 1133 20th Street NW Suite 300, Washington, DC 20036. Tel: 800-356-6317; Tel: 202-296-8400; Fax: 202-223-7053; Web site: http://www.agb.org
Publication Type: Reports - Descriptive
Education Level: Higher Education; Postsecondary Education
Audience: Administrators; Policymakers
Language: English
Sponsor: Crowe Horwath LLP
Authoring Institution: Association of Governing Boards of Universities and Colleges