Gulliver, CEOs, and University Presidents
University presidents are starting to feel some of the constituency pressure visited since the 1980s on their CEO counterparts in corporate America. Until then, CEOs reigned supreme over their corporate bastions, many ruling with an iron fist. Directors were supportive and shareholders deferential. There would be occasional upheaval but this was rare. CEO tenures were long. Those days have been long gone for some time.
Until the past few years, university presidents ruled their roosts as well, with helpful trustees and deferential faculty. Not anymore.
As John Sexton of NYU found out in a “no-confidence” vote of his largest faculty group last week, the constituencies are restless. NYU’s trustees pledge their continued support, but other NYU faculties and some of the school’s unionized employees promise further pressure. Last summer, Teresa Sullivan, president of U. Va., felt such pressure from the university’s trustees, who ousted her temporarily until the faculty came to her rescue. Similar upheaval occurred at Harvard a few years ago and more recently at Oregon, Texas and Wisconsin (and at several other places if academic leaders below the rank of president are counted).
Interestingly, presidents in quite a few of these episodes have been charged with the complaint of operating the university too much like a corporation. That’s one of the central assertions of the NYU faculty voters, who say Sexton is too focused on growth. They cite his “Global Network University” with lucrative campus footprints worldwide and his tendency to pay high salaries to selected scholars rather than offer across-the-board increases. Many are upset at plans to expand the Greenwich Village campus in a radical way. They despise his top-down management style.
So presidents who run their universities like corporations now face the fate of corporate chiefs for doing so. The power of shareholders and directors increased exponentially in the past 20 years, making the all-powerful CEO a relic. With the rising power of faculties and trustees in the university, academic presidents may soon turn into short-term caretakers as well.
There is a good case that the pendulum swung too far in corporate America in favor of shareholder democracy and outside power. It will be a shame if a similar thing happens to America’s universities. Maybe that’s the NYU faculty’s point. Sexton should probably not run NYU as if it were a modern corporation, given its educational mission and unique fiduciary duties to attend to student needs rather than to maximize profits for shareholders. Running NYU that way not only subverts those goals, but will ultimately and ironically weaken the president’s position.
Photo: Gulliver’s Travels, an apt analogy for what happened to corporate CEOs from 1980 to 2000 and what may be happening to university presidents.