Tuesday, July 3, 2012

Business vs. Academia: An Interesting View from the Dark Side

In the wake of the Teresa Sullivan firing/rehiring debacle at UVa, much has been said about an old debate in academia: the applicability, or lack thereof, of models from the business world to higher education. I have made a few comments on this topic myself in recent days; today I bring an interesting note from the "dark side" (that is, the business world).

The note stems from a short comment issued by Moody's Investor Service, picked up by the Chronicle of Higher Education. Moody's, of course, is one of the famous (or infamous) "ratings agencies" that exist to evaluate businesses with regard to their creditworthiness and general financial health. If you are of the view that business is a dirty, filthy, corrupting environment and that higher education should stay as far away as possible from it, then Moody's is something like the belly of the beast.

In that regard, the brief comment (less than 4 pages, much of it graphs and graphics) they have published is worth reading (see the link above). I don't agree with everything in it, and I have no doubt that their habit of putting the credit rating of every university they mention in parentheses will likely give some of my faculty friends the willies, but they come to a very interesting conclusion. In surveying the mess that was the UVa scandal, they write that

the clash between the president and some members of the University of Virginia board highlights the stabilizing effects of the counter-intuitive “shared governance” model still in place at leading US universities. Under this model, which is dramatically different from top-down corporate governance models as well as electorally-driven government models, the tenured faculty, and to a lesser extent the alumni, students and donors, have a powerful role to play in major university decision-making. 

They go on to point out that there is a problem between governance models at public universities, where boards are generally appointed by the state government, and funding models in which the state gives less and less money to those same universities. Moody's expects this disjuncture to create more conflicts in the coming years - an entirely reasonable prediction. But their report also suggests that even the ultimate bean-counters see real value in a model in which faculty have power "even to the extent of quickly blocking a strategic decision of the governing board".

I don't expect faculty groups to start inviting Moody's execs to their cocktail parties anytime soon. But this brief comment from the world of bean-counting accountancy suggests that there may be more common ground between business and academia than we had suspected - if we take the opportunity to listen.

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