Governance

Nonprofit Revitalization Act of 2013 Signed by Governor Cuomo

December 20, 2013

By Frank J. Patyi

On December 18, 2013, Governor Cuomo signed the Nonprofit Revitalization Act of 2013 (the “Act”) passed by the New York State Legislature this past July.  The Act will become effective July 1, 2014, and makes a number of significant changes to the law regarding nonprofit corporations.  These changes will affect virtually every nonprofit corporation in the State of New York, including colleges and universities.  The Act also makes numerous changes regarding internal controls, conflicts of interest, audit requirements and other governance issues.  Some of the changes create greater restrictions, such as requiring all nonprofits to adopt written conflict of interest policies, and requiring nonprofits with 20 or more employees and annual revenue of more than $1 million to also adopt whistleblower policies.  Other changes remove antiquated provisions that have complicated simple governance issues like conducting board meetings.  For example, the Act specifically provides that facsimile and e-mail notices may be used for board and membership meeting notices and waivers, and confirms that they also may be used for votes that require unanimous written consent.  It also allows board members to participate in meetings by video conference, Skype and other forms of video communication.  By allowing the use of what has become readily available technology, the Act will help New York’s law conform with modern corporate realities of boards of directors that include members in far off locations who have difficulty attending regular meetings in person. The Act creates both opportunities and responsibilities for nonprofit organizations to review, update and improve their operational processes based on the new statutory requirements. This will require, among other things, the adoption of new policies and possible changes to organizational documents.

Adjuncts, Governance and Union Organizing

November 27, 2013

By John Gaal
In the private sector, most full-time (tenured/tenure track) faculty are currently considered “managerial” under the National Labor Relations Act (“NLRA”), making them ineligible for the protections of the NLRA, including the right to organize and bargain collectively.  (Managers and supervisors are not considered “employees” under the NLRA.)  Managerial status does not preclude an institution from voluntarily recognizing a faculty union, but it does prevent faculty from compelling a unionization vote under the NLRA.  At the risk of oversimplifying, what makes most private sector full-time faculty managerial is their shared governance role. Adjuncts, or contingency faculty, on the other hand are often not included in the shared governance model.  The Chronicle recently reported on a study presented at this year’s Association for the Study of Higher Education (“ASHE”) annual conference on adjuncts and shared governance.  According to The Chronicle’s report, the Study examined more than 100 research universities in an attempt to quantify adjuncts’ involvement in governance.  The Study found that at about two-thirds of the institutions studied, faculty senates were off-limits to adjunct instructors who had less than half the workload of a full-time faculty member.  The remaining one-third of institutions were about evenly split between those whose faculty senates were more open to adjuncts and those whose senates were more restrictive in terms of access for adjuncts.  Interestingly, these results are inconsistent with AAUP’s view, reflected in a report  issued in late 2012  which recommended that eligibility for voting or holding office in shared-governance bodies should be the same for all faculty, regardless of their full-time or part time status. Because adjuncts, who along with others who constitute the “contingent” faculty that now comprise perhaps as much as 75% of higher education teaching ranks, do not participate in shared governance, they generally are not considered managerial under the NLRA.  As a result, they are entitled to compel unionization through the National Labor Relations Board’s election procedures.  And over the past several years, adjuncts at a number of institutions have actively pursued this path, often with a fair degree of success. For example, when adjuncts at Georgetown University voted to unionize this past May with SEIU Local 500, it purportedly raised the number of adjuncts in the District of Columbia organized by Local 500 to more than 75% (including adjuncts at previously organized American University, George Washington University, and public Montgomery College) .  The potential long term impact of achieving this level of “density” success across all of D.C. is apparent.  More recently, a similar "regional" approach was started by SEIU in Boston.  Operating under the name Adjuncts Action, adjuncts at Tufts University voted to unionize this past September, and unionization efforts are underway at Northeastern University and Lesley University.  This effort suffered a setback in late October when adjunct faculty at Bentley University in Boston voted 100-98 against unionization.  (Objections to the election outcome have been filed and are pending.)  Despite this setback, the trend appears clear and institutions should expect efforts to organize adjunct faculty will continue, and likely expand, across the country. While there are a number of factors that undoubtedly contribute to adjuncts’ interest in organizing, and economic factors are often prominently noted, in reality experience suggests that it may often be non-economic factors that ultimately drive the outcome.   As with any other employee group, non-economic factors are often as important as economic factors when it comes to unionization.  In this context, the more critical question may be how are adjuncts treated on their campuses?  Are they welcomed and received by the rest of the campus community as important contributors to the overall mission, or not?  Ironically, it can often be their relationship with their full-time colleagues that creates a tension and feeling of disrespect (or at least insufficient respect) which is a contributing factor in unionization decisions.  In other words, an interest in securing an institutional voice like their full-time colleagues may drive the outcome as much as anything else.  As noted, at most institutions examined in the ASHE Study, adjunct involvement in shared governance is limited and that voice does not exist.  Yet, at least one faculty study has concluded that involvement in meaningful shared governance may be a more important indicator of faculty satisfaction than economic factors.  There is little reason to think this conclusion is not as relevant for contingent faculty as it is for full-time faculty. The moral?  Institutions should consider promoting the involvement of their adjuncts in governance matters.  Not only may it result in more satisfied adjuncts, but it might also impact their status as possibly "managerial" members of the institution.

Sexual Misconduct and the Board: What Role?

November 15, 2013

By John Gaal
There is no denying that sexual misconduct on campus is a major issue for all institutions today, from both a campus “quality of life” and a risk management perspective.  With all the attention sexual misconduct cases are generating, an appropriate question to consider is what role should the Board of Trustees play in these issues?  The Association of Governing Boards of Universities and Colleges (“AGB”) recently addressed this question.  In its Advisory Statement on Sexual Misconduct, the AGB suggested several practices for governing boards and institutional administrative leadership.    Recognizing the Board’s fiduciary duty to address issues related to the overall campus culture, including sexual misconduct, AGB advises that: 
  • governing Boards should monitor sexual misconduct issues consistent with their oversight of other forms of institutional risk (which requires a balancing that avoids micromanagement but permits being adequately informed so that it can assess institutional effectiveness);
  • Boards should regularly request formal reports from administration detailing the nature of the risk, the likelihood of its occurrence, and the existence and effectiveness of internal controls for risk mitigation (from an overall perspective and not necessarily in terms of any individual case);
  • Boards should encourage dialogue on sexual misconduct, and other issues that are important to the institution’s well being (AGB points out that “scrutinizing information, asking difficult questions, challenging assumptions, and introducing innovative ideas[,] improves the quality of institutional outcomes.”);
  • Boards should promote this dialogue by:
    • discussing legal developments and national trends related to Title IX and sexual misconduct, and making sure they are sufficiently informed as to where their institution stands in terms of compliance with those developments and in light of national trends;
    • discussing these issues with the institution’s administrative leadership and planning for discussions of these issues on an ongoing basis with that leadership (as part of this effort, Boards need to determine what form these discussions will take – will they be with the full board or a board committee -- and establish an appropriate expectation for the administration to keep the Board (or appropriate committee informed);
    • reviewing the institution’s policies in this area and being aware of how they are implemented;
    • confirming that a Title IX Coordinator has been named (and who it is), appropriate training is being provided to members of the institutional community, all parties (complainant and accused) are being treated equally, fairly, and adequately, and the institution is monitoring its overall climate as it relates to sexual misconduct. 
With respect to administrative leadership, AGB suggests: 
  • the institution’s chief executive (with support from others) ensure that the Board receives relevant information regarding these issues and engage the Board in periodic briefings about this topic, both in terms of legal developments and the institution’s response;
  • the chief executive ensure that the Board receives sufficient information to facilitate its effective review of institutional response to sexual misconduct and that this issue is properly part of the Board’s agenda and part of the orientation for new Board members; and
  • the chief executive also ensure that the rest of the institutional community – staff, faculty and students – are aware of the Board’s commitment to campus safety and oversight of related policies. 
These guidelines provide an excellent starting point for ensuring that the Board is properly engaged on this very important topic.  While, as noted by AGB, caution needs to be exercised to avoid micromanagement of the institution, the issue of sexual misconduct is simply too big an issue, on any number of levels, for the Board to fail to get involved and exercise appropriate oversight.