When I was a Superintendent in the public system, there was never any confusion about conflict of interest. Public Board trustees constantly look over their shoulders to avoid even the slightest appearance of conflict. Our Board Chair, for example, was married to an EA in the system. Whenever any discussions or votes took place that affected EA staffing, salaries or even school placement, he absented himself from the Board room.
I have found independent schools, by comparison, to be a bit more laissez-faire in their approach to managing conflict around the Board table. Parents often engage in active discussions about staffing levels, class size and even, on occasion, teacher competence and tenure that have a direct impact on their own child. Rarely have I seen parent Board members absent themselves for discussions of proposed tuition increases or even refrain from voting for or against them. In other cases, Board members who bring outside expertise to the table can occasionally slip into blurring the lines between their own business and that of the school.
Here then are five short case study examples where Boards have slipped into conflict.
1. Money management: The Finance Chair of a large day school was also appointed by the board to be the business manager. Given his background in finance and investment this seemed like a win-win. (No-one seemed to realize that any oversight had just gone out the window.) A couple of years into this arrangement, the faculty found one month that their pay cheques were hand-written on the Finance Chair's personal account. It appears that he had been managing the school's money through his own investment company and realizing a nice service fee. In this case, he had locked in too much cash and had to dip into his own resources to meet payroll. Nothing illegal took place, but it was a nasty conflict of interest.
2. Programme Changes: Two influential Board members at a small boarding school, pressured the administration into introducing AP courses for their senior students. Given the small enrolments, the implementation was not cost effective and resulted in significant financial strain on the school's budget. The programme lasted two years, just long enough for the two trustees' daughters to get their credits and be accepted into a prestigious U.S. university, and then it was dropped.
3. School Expansion: A small urban day school was interested in expanding its capacity to increase its enrolment. The school was located in a lovely old mansion in a prestigious neighbourhood but was restricted in its growth by a lack of neighbouring space. A Board committee, chaired by a trustee with a real-estate background, researched other possibilities and identified a vacant building about a mile away. The trustee brokered both the sale of the existing school building and the purchase of the new one, collecting commissions along the way. Years later it was discovered that not only had the school significantly overpaid for the new location (which was in a much less desirable neighbourhood) but that the old school had been sold at a bargain basement price to a friend of the trustee who then flipped it a year later for a tidy profit. The school was saddled with a major debt load in the process and eventually was forced to close.
4. Student Discipline: The child of the Board Chair was asked to leave a school due to issues with trafficking drugs to boarders. Policy and procedure were followed to the letter and the Head kept the Board in the loop publicly and the Chair apprised privately as the case proceeded. The Chair publicly praised the Head for how the issue was handled and then worked behind the scenes for the next six months to undercut him with the Board and eventually have him fired. The Board subsequently woke up to what had happened, removed the Chair from the Board, and asked the Head to stay on. It was too late. The Head had accepted another position and left, leaving the Board and the school in disarray.
5. Head Selection: The Board of a highly successful rural boarding school tasked a Search Committee to recruit a new head to replace a well-respected, retiring incumbent. Due to the strains of distance, the process took much longer than anticipated. Finally the committee invited a short list of five candidates to visit the school for interviews. After a gruelling month of consecutive visits, interviews, meetings and reference checks, it was clear to the committee that there was no really outstanding candidate. Although the current Head offered to stay on while they continued the search, the Committee was tired and fed up and had no real stomach to reboot the process. Putting their own fatigue and frustration ahead of the long-term interests of the school they hired the best of a mediocre lot and the school eventually paid the price in losses of both enrolments and donation dollars.
In all of the above cases, the fiduciary duty "to subordinate every personal interest to those of the corporation", was compromised. Needless to say, some violations are more heinous than others, but without clearly understood and enforced conflict of interest guidelines it becomes very easy for a Board to drift into poor practice. What starts with a trustee complaint about a teacher, or a programme, or a proposed fee hike can easily morph into a whole Board that has lost its strategic focus and struggles instead with competing personal interests. When that happens, the whole school community suffers.
I have found independent schools, by comparison, to be a bit more laissez-faire in their approach to managing conflict around the Board table. Parents often engage in active discussions about staffing levels, class size and even, on occasion, teacher competence and tenure that have a direct impact on their own child. Rarely have I seen parent Board members absent themselves for discussions of proposed tuition increases or even refrain from voting for or against them. In other cases, Board members who bring outside expertise to the table can occasionally slip into blurring the lines between their own business and that of the school.
Here then are five short case study examples where Boards have slipped into conflict.
1. Money management: The Finance Chair of a large day school was also appointed by the board to be the business manager. Given his background in finance and investment this seemed like a win-win. (No-one seemed to realize that any oversight had just gone out the window.) A couple of years into this arrangement, the faculty found one month that their pay cheques were hand-written on the Finance Chair's personal account. It appears that he had been managing the school's money through his own investment company and realizing a nice service fee. In this case, he had locked in too much cash and had to dip into his own resources to meet payroll. Nothing illegal took place, but it was a nasty conflict of interest.
2. Programme Changes: Two influential Board members at a small boarding school, pressured the administration into introducing AP courses for their senior students. Given the small enrolments, the implementation was not cost effective and resulted in significant financial strain on the school's budget. The programme lasted two years, just long enough for the two trustees' daughters to get their credits and be accepted into a prestigious U.S. university, and then it was dropped.
3. School Expansion: A small urban day school was interested in expanding its capacity to increase its enrolment. The school was located in a lovely old mansion in a prestigious neighbourhood but was restricted in its growth by a lack of neighbouring space. A Board committee, chaired by a trustee with a real-estate background, researched other possibilities and identified a vacant building about a mile away. The trustee brokered both the sale of the existing school building and the purchase of the new one, collecting commissions along the way. Years later it was discovered that not only had the school significantly overpaid for the new location (which was in a much less desirable neighbourhood) but that the old school had been sold at a bargain basement price to a friend of the trustee who then flipped it a year later for a tidy profit. The school was saddled with a major debt load in the process and eventually was forced to close.
4. Student Discipline: The child of the Board Chair was asked to leave a school due to issues with trafficking drugs to boarders. Policy and procedure were followed to the letter and the Head kept the Board in the loop publicly and the Chair apprised privately as the case proceeded. The Chair publicly praised the Head for how the issue was handled and then worked behind the scenes for the next six months to undercut him with the Board and eventually have him fired. The Board subsequently woke up to what had happened, removed the Chair from the Board, and asked the Head to stay on. It was too late. The Head had accepted another position and left, leaving the Board and the school in disarray.
5. Head Selection: The Board of a highly successful rural boarding school tasked a Search Committee to recruit a new head to replace a well-respected, retiring incumbent. Due to the strains of distance, the process took much longer than anticipated. Finally the committee invited a short list of five candidates to visit the school for interviews. After a gruelling month of consecutive visits, interviews, meetings and reference checks, it was clear to the committee that there was no really outstanding candidate. Although the current Head offered to stay on while they continued the search, the Committee was tired and fed up and had no real stomach to reboot the process. Putting their own fatigue and frustration ahead of the long-term interests of the school they hired the best of a mediocre lot and the school eventually paid the price in losses of both enrolments and donation dollars.
In all of the above cases, the fiduciary duty "to subordinate every personal interest to those of the corporation", was compromised. Needless to say, some violations are more heinous than others, but without clearly understood and enforced conflict of interest guidelines it becomes very easy for a Board to drift into poor practice. What starts with a trustee complaint about a teacher, or a programme, or a proposed fee hike can easily morph into a whole Board that has lost its strategic focus and struggles instead with competing personal interests. When that happens, the whole school community suffers.
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