Trustees versus Directors, Whom Do They Serve? Boards, For‐Profits and the Public Good in the United States

Abstract

Postsecondary education in the United States is provided by public, not-forprofit and for-profit institutions. Public and not-for-profit institutions are expected to serve the public good due to state control or chartering requirements; for-profit institutions are not. Therefore, the decision to serve the public good is vested in the board. The for-profit director's role as representative of shareholders' interests does not ensure deference to the public good. Currently, national priorities are aligned with shareholder interests creating an environment ripe for expansion of for-profit education. However, there are implications as national priorities shift to positions that do not complement shareholder interests. Most critically, continued growth of for-profit postsecondary education may lead to a reduction of service of the public good by all institutions. Private institutions (not-for-profit or for-profit) exist in every large country; therefore, a thorough analysis of the legal distinctions among sectors is encouraged to understand the implications of growth.Postsecondary education in the United States (US) is provided by a combination of public, not-for-profit and for-profit institutions in a decentralised system. Over the past 15 years these labels have become less descriptive of operational differences as changes have occurred in all sectors in levels of degrees offered, staffing models, scheduling and distance education (Kinser

A Quantitative Analysis of the Effects of Postsecondary Institution Conversions from Not-For-Profit to For-Profit

“…These are functions generally provided by not-for-profit and public institutions. However, for-profit institutions are not under the same legal obligation to provide public goods (Fox Garrity 2015). James (2011) noted that when compared to not-for-profits, for-profits do not further the public good, because they forsake research and service, fail to promote civic engagement, and yield poor social and economic outcomes for their graduates.…”

Who Governs American Nonprofit Private Universities? An Analysis of Board Composition

“…Relatedly, the relationship between the university president and board of trustees had diverse dynamics. Firstly, Stanford illustrated the typical linear hierarchical dimension -from the board down to the president -that is often described in the literature (e.g., Bowen, 2012;Fox Garrity, 2015;Hermalin, 2004): "The board delegates broad authority to the president to operate the university and to the faculty on certain academic matters" (italic added). Secondly, and contrastingly, Yale showed the opposite direction when regulating that the trustee board elected the university president who simultaneously led the trustee board.…”

Determinantes de la divulgación de información en las universidades Latinoamericanas para un buen gobierno corporativo

“…En el anterior contexto, las universidades producen diversos tipos de bienes, como los bienes públicos (Garrity, 2015) y bienes comunes (Frost y Hattke, 2018). Los bienes públicos se caracterizan por no ser competitivos ni excluibles (Marginson, 2017).…”