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Degrees of TransparencyAn inside look at how different Baylor groups operate, from the Board of Regents to faculty, student, and alumni organizations
By Todd Copleand, Illustration by Leigh Wells
In September 2003, three days before Baylor University's Board of Regents was scheduled to meet, five regents decided to take a highly unusual and controversial step. They issued a public letter calling for the full board to vote on a motion concerning an issue central to the challenges Baylor was facing at the time.
"We have not come to this decision lightly," wrote the group of regents. "The future of Baylor University is a matter of deep concern to all of us, and any decision of this magnitude should be entered into only after much discussion, thoughtful examination, and fervent prayer."
Setting aside the particular cause of concern on that September day, the five regents' action still merits consideration today because it brought attention to an issue that a segment of the Baylor community viewed--and continues to view--as problematic: the predominantly closed environment within which the regents operate, deliberate, and make decisions.
While some applauded the five regents' decision to step out and speak in a public forum, others in the Baylor family criticized the move as an inappropriate breach of the regents' code of confidentiality. "All of this will be reviewed and debated carefully later this week at the board meeting," the chair of the board said in a statement released by Baylor. "Board members will be able to convey their concerns and then look at the true facts and make a decision. This is the
correct and right process, as opposed to trying to spin stories in the media."
Today, members of that group of regents say they decided to speak out publicly because they were frustrated by what they considered to be the excessive constraints of confidentiality imposed upon them as members of the board. "That's one reason we went public, because we knew once we had a board meeting and discussed that particular issue, then we wouldn't be able to talk about it any more," said Jaclanel Moore McFarland '74, JD '77, a partner of the McFarland and McFarland law firm in Spring who served more than fourteen years as a Baylor regent before rotating off the board in 2006.
John Wilkerson '57, whose more than eighteen years as a regent included two years as the board's chair, told the Line that the situation required a public statement. "We wanted everyone to know what we thought needed to be done," he said.
An Evolving Environment
Those regents' public letter five years ago could have marked a turning point for the functioning of the board, prodding the board toward increased transparency and openness to input from constituent groups as Baylor worked through a set of difficult issues facing the university.
However, the board's practices haven't changed in the intervening years, much to the chagrin of those in the Baylor community who--subscribing to former U.S. Supreme Court Justice Louis Brandeis's statement that "sunlight is said to be the best of disinfectants"--believe that transparency could prevent mistrust and misunderstandings about board actions and allow Baylor's constituencies to participate more fully in the university's direction.
Transparency and openness appear to be a natural fit for academia, where the related principles of shared governance, honesty of inquiry, the free marketplace of ideas, and academic freedom are championed. Today, such governmental entities as the Commission on the Future of Higher Education, appointed by U.S. Secretary of Education Margaret Spellings, and the U.S. Senate's Finance Committee are encouraging institutions of higher learning to establish higher standards of transparency and accountability on a range of issues, from the quality and cost of education to the use of endowment funds.
Similarly, the issue of governing boards' transparency has become a topic of national concern. In January 2007, the Association of Governing Boards of Universities and Colleges (AGB)--located in Washington, D.C., and serving more than twelve hundred member institutions--adopted the "AGB Statement on Board Accountability." In a section on board performance, the statement reads, "The quality of a board's conduct of its business should be a model that guides the rest of the institution, setting standards that invite emulation in campuswide governance and management."
In that regard, the AGB statement continues, "Board proceedings and communications should be as accessible as applicable practices and policies permit. For state-supported institutions, this means that board and committee sessions take place in public, save for those discussions that are expressly exempt from open-meeting laws. . . . Although such laws typically do not apply to boards of independent institutions, such boards should conduct their business and record their deliberations as though the board was subject to comparable public scrutiny."
AGB president Richard Legon told the Line that his organization's statement grew out of the changing national environment and is intended as a general recommendation. "There are probably institutions that think one of the benefits of being a private university is that their meetings can be closed," he said. "But in an era when governance is clearly in the spotlight, how we govern our not-for-profit organizations across the country is being scrutinized. Today there is a clear recognition by boards, for both public and private institutions, that boards are a part of the overall need for increased accountability in higher education. Every board should take a look at how it deals with the question of accountability--what I call the 'to whom' and 'for what' they are ultimately responsible--and how they meet that standard. But we need to leave it to the good judgment of trustees to determine what's practical for each institution."
What is practical for Baylor's Board of Regents, with regard to its transparency and openness, is something only the regents are empowered to determine. Should board meetings be conducted behind closed doors or out in the open, subject to the scrutiny and input of the institution's various constituencies? How do the current and past practices of Baylor's board compare to other institutions in American higher education? And what is the general culture of transparency and openness at Baylor as demonstrated by the official groups representing students, faculty, and alumni?
Such questions lie at the heart of Baylor's life today.
Apples and Oranges?
Those who advocate for the most transparent and open form of university governance have in mind a public entity like the University of Texas System, which governs nine universities and six health institutions across the state.
The Board of Regents of the UT System consists of nine voting members--appointed by the Governor of Texas and approved by the Texas Senate--who serve six-year terms. In addition, a non-voting student regent, who serves a one-year term, sits on the board. Board members are responsible for acting on behalf of their fellow citizens as their individual consciences and judgment dictate. And because it governs a public institution, the UT System's board is required by a variety of state laws to function in a transparent manner.
Perhaps the two most prominent laws in the Texas Government Code affecting the UT System's board are the Texas Public Information Act and the Texas Open Meetings Act. The former can be thought of as operating behind the scenes, guaranteeing the retention of and public access to any board-related information, except for some items that are legally protected from disclosure. The requirements of the Texas Open Meetings Act, on the other hand, are more front and center and can be most easily observed before and during a board meeting.
Prior to each meeting, the board must provide public notice--through the online Texas Register produced by the Secretary of State's office--of the time, date, and place of the meeting as well as a complete agenda, with each item to be discussed or voted on described in sufficient detail for a member of the public to understand the issues and possible actions at stake. In a similar spirit, board meetings are required to be open to all members of the public, whether they are curious citizens or newspaper reporters.
An exception to this requirement exists for portions of the meeting that are conducted in closed, or "executive," session, provided the specific statutory exemption permitting such a session is identified by the board. Such executive sessions--during which board members can exclude everyone else, including senior administrators, from the meeting and a code of absolute confidentiality is imposed--are used to address issues such as attorney consultations, real estate deliberations, and personnel matters.
The UT System's board goes a step further than legal requirements in providing webcasts, which are archived, of most of its meetings.
After a board meeting, the minutes--often running for more than one hundred pages--are placed online for public access. Also available on the UT System board's website is an agenda calendar of upcoming meetings, the regents' "Rules and Regulations," the board's committee assignments, and the address and phone number for each regent.
That's the world in which the governing board of a public institution in Texas lives. Baylor's governing board, however, lives in a different world--that of private, or "independent," colleges and universities. Such institutions' governing boards are not legally required to exhibit the same level of transparency and openness that pervades the public sphere. "As a result, a comparison of Baylor to the University of Texas is not appropriate because the legal framework is different," Charles Beckenhauer, Baylor's general counsel, told the Line.
However, Baylor is subject to some degree of public scrutiny. As an organization granted status as a nonprofit 501(c)(3) corporation by the federal government, Baylor must comply with IRS regulations that define the proper and improper activities of organizations that enjoy such tax-exempt standing. In compliance with these federal regulations, Baylor and other 501(c)(3) nonprofits are required to file an annual IRS Form 990, which is available to the public on Guidestar's website, guidestar.org. "The IRS Form 990 is really the public view of the entity," Beckenhauer said.
Anatomy of Baylor's Board
Like every other nonprofit corporation in Texas, Baylor is chartered by the Texas Secretary of State under Texas law. As fiduciaries of the university, however, Baylor's regents are vested with full and independent oversight of the institution. As stated in Baylor's bylaws, "The business and affairs of the University are under the sole management and control of the Board of Directors who have and may exercise all of the powers and authority of a board of directors under and pursuant to Chapter 22 of the Texas Business Organizations Code and other applicable law."
Nevertheless, as the AGB cautions in its online materials about higher education governance, "Independence from governmental control is relative and will be sustained only as long as governing boards and their administrations keep their houses in order and meet their fiduciary and ethical responsibilities. This principle is equally true for nonsectarian and religiously affiliated institutions."
Baylor's Board of Regents, which convenes for regular board meetings four times a year, is currently composed of twenty-one members--at least one-fourth of whom are appointed by the Baptist General Convention of Texas (BGCT), with the remainder being elected by the board itself. Every regent must be a Baptist, and three-fourths of the overall board must reside in Texas at the time of election. The board is currently progressing through a change in its size that began in October 2005, when the regents approved amendments to the institution's Articles of Incorporation that called for a reduction from thirty-six to sixteen members over a nine-year period. That reduction is being achieved by attrition; when regents complete their originally appointed terms of service, those positions are eliminated until a final number of sixteen is achieved.
Also in 2005, the board reduced the maximum number of years of consecutive service by regents from nine to six, so that new regents are restricted to two consecutive three-year terms and must remain off the board for at least five years before being reappointed.
The members of Baylor's Board of Regents are named in the senior administration section of Baylor's website, although no individual contact information is provided. Those who wish to contact regents or gain information about the board can do so through the president's office. Baylor has always publicly announced the officers of its board, which currently change each year, and the regents' assignments to the various standing committees are not considered confidential, although they are not available online.
As is the case with other private institutions, some business of the organization is made public, while other business is not. For example, policies adopted by Baylor's board for university-wide application, such as the conflict of interest policy and the ethics policy, are publicly announced when adopted and may be made available to the university community. On the other hand, some board policies, which govern internal board operations, are not normally shared publicly since their application is limited, according to Baylor's Office of General Counsel.
Two other items an interested Baylor graduate won't be able to find on his or her alma mater's website are a schedule of upcoming regent meetings and the minutes of those meetings. The meetings' dates aren't considered confidential; the university simply elects not to publicize them, although it is widely understood that the dates of two regents meetings coincide annually with Homecoming and spring commencement. Baylor also chooses to keep confidential the minutes of its board meetings, often because of the sensitivity of issues discussed or because they contain items discussed or decided in executive session. The board's minutes are housed in The Texas Collection, a special-collections library at Baylor designated as the university's official archive. The president's office occasionally fields requests for information about the board's minutes, and if the request is specific--for instance, a desire to gain information about the board's approval of a particular academic program--and doesn't involve confidential matters, then the administration is often willing to locate and extract that information from the minutes and provide it to the requestor.
For general purposes, the information that alumni and other members of the Baylor family receive from the university about the proceedings of a given board meeting is contained in the press release that the university produces following the meeting's conclusion. A few times, the regents have held a press conference following a particularly significant meeting.
As a private university, Baylor is free to conduct its board meetings in private. As is common at other private institutions, Baylor's board fully exercises this privilege, meeting behind closed doors with only senior administrators or invited guests. The board's chair presides at all meetings, in addition to appointing all of the board's standing committees and designating their respective chairs. The meetings are conducted in accordance with Robert's Rules of Order. The board meets in executive session for a portion of each regular board meeting, according to the general counsel's office, with executive session being defined as any meeting, or portion of a meeting, at which the proceedings are secret.
The topics that Baylor's board addresses in executive session correspond to those treated in similar fashion by the boards
 of public institutions and other nonprofit organizations, including personnel, litigation, and real estate issues. Beyond regents, the president, general counsel, parliamentarian, and an assistant corporate secretary who takes minutes typically remain present in an executive session. And the board sometimes asks guests who are relevant to a specific matter under consideration to participate in the executive session portion of a board meeting. The board does possess the ability to exclude the president if it wishes to confidentially discuss a matter pertaining to the president.
Confidentially Speaking
In recent years, there has been a good deal of discussion within the Baylor family about the pros and cons of Baylor's practice of conducting its board meetings behind closed doors, as well as about the board's use of executive session and the extent to which individual regents should be free to discuss with the general public matters considered or decided upon by the board.
"For the board to function in Baylor's best interest, board members must feel as if they can openly discuss, debate, and vote upon very sensitive issues without undue influence, pressure, or coercion from any third party," said Dr. Howard Batson (pictured, right), PhD '95, pastor of First Baptist Church of Amarillo, who is serving as chair of the board for 2008-09 during his ninth and final year as a regent. "The confidential nature of Baylor's board meetings is in keeping with the way most private universities operate. It is no coincidence that the great majority of private universities have found that governance is best done when board members are in a confidential setting that allows them to speak and vote unhindered."
Out of respect to Batson's preference that he, as chair, serve as the sole spokesperson for all current regents, the Line refrained from surveying other current regents about the relative merits of Baylor's high-confidentiality approach to board governance. However, some former Baylor regents disagreed with Batson.
"I think there may be some benefit to keeping certain discussions and decisions in house because they become less subject to external criticism," said Hal Wingo '57, who served as a Baylor regent from 1992 to 2001. "But I do think it would have benefited the board and the university for regents to have been more willing to listen to other people--students, faculty, alumni. A lot of the grief that has been visited upon Baylor over the last few years could have been avoided if the board's attitude had been much more one of openness and communication."
Randall Fields '70, MBA '71, JD '77, a licensed attorney and financial advisor with Broadway Brokerage Services in San Antonio, was a Baylor regent from 1989 to 1999, including two years as chair. "When I was chair, I reminded people from time to time that everything we said during the meetings was confidential. So I was part of the system, I suppose," he said. "Looking back on it, I think that was choosing the worse of two evils. There are disadvantages to being completely open, granted. But the disadvantages of being completely closed far outweigh them. We like to think that we are autonomous, that we answer only to ourselves. But the truth is we answer to the public, through the state attorney general and the IRS from a legal standpoint. And on a matter of principle, we answer to our constituents, which include faculty, students, donors, alumni, and the families of students. The more transparent you are, the more legitimacy and trust you will engender in all of those groups."
The least transparent element of a board's governance is what occurs during an executive session portion of a board meeting, about which board members are pledged to secrecy. While the boards of public institutions must cite the specific statute in the Texas Government Code that permits them to enter into an executive session, a private university like Baylor needs no such legal basis. It is a matter of the will of the board. In either case, the use of executive session can be a valuable tool in a board's effective governance.
"During executive session of a committee or the full Board of Regents, sensitive issues are addressed. This is for the protection of Baylor's best interest, as well as protection of those involved in the issues at hand," regent chair Batson said. "For example, an executive session might include discussion about sensitive personnel issues or possible real estate purchases. Let's use real estate for an example. If it were made public that Baylor was considering purchasing Lot A, then the price of surrounding properties might escalate beyond reasonable market value, causing the university to exercise poor stewardship of its resources."
According to a national survey conducted in 2004 by the AGB, 48.6 percent of private institutions held executive sessions at every meeting. By 2008, that number had risen to 56.9 percent, and a total of 87.6 percent of private colleges and universities hold an executive session at least at some board meetings.
A random check of Baylor's board minutes, performed by the administration at the request of the Line, showed that of ten meetings held prior to June 1995, seven had indications of an executive session being held. Similarly random checks of board minutes for five meetings held from 1995 to 2005, as well as for five meetings held from 2005 to today, revealed an executive session at each meeting.
Considering such information, it appears the use of executive session has long been commonplace in Baylor's board meetings and that Baylor's practices correspond to the majority of other private institutions. However, some former regents contend that as the turmoil surrounding the university's leadership grew during the mid-2000s, the length of executive sessions--as well as the types of issues addressed in them--increased inordinately and have remained in that condition ever since.
"The first nine years I was a regent, if we had an executive session, it was limited to a minimal number of items--normally not more than one," said former regent chair Wilkerson, whose service on the board began in the late 1980s and concluded in 2007. "During the later years of my time on the board, executive session was used to muzzle the board. Many things that didn't need to be discussed in executive session were, and it got to the point where what we did outside of executive session was really of no consequence. Anything that anyone would want to know about or that should have been disseminated to the university's constituents was done in executive session so that it wasn't able to be communicated."
McFarland, whose similarly long term on the board overlapped with Wilkerson's, told the Line that an executive session was not a standard part of board meetings in the 1990s. But that dramatically changed, she said.
"From 2003 through 2005, we had a lot of executive sessions that lasted a long time, but I can't comment on what was said in them. It got to the point during those years where there was probably too much that went on in executive session," McFarland said. "I think it was a culture that developed not so much out of need, but out of paranoia. There were a lot of things that some people just didn't want anyone else to know. One way to keep board members from discussing something, whether it's with faculty or alumni, is to put it in executive session. Certainly, there is a time and a place for executive session during meetings, but it got to be where almost everything, except for vice presidential or committee reports, was in executive session, and it didn't need to be. And so then they would say, 'You can't talk about that because it was in executive session.' Why was it in executive session? It didn't make any sense."
Given that Baylor's board meetings are closed to the public, does that mean everything the regents discuss and vote on behind those closed doors is to be considered confidential?
Such expectations of confidentiality were certainly operative in the past, former regent chair Fields said. "There was a strict spoken order of conduct that what went on in the meetings stayed in the meetings," he said. "It was like being a Mason--a closed society. The executive session would take place when we asked administrators to leave, but even the other parts of the meetings were still considered confidential. Nothing was supposed to get out other than what was authorized by the chair."
Such expectations remain the case today as well. "The chair is the spokesperson for the regent body. All official communication to the public is to go through the chair or others who are temporarily designated as spokespersons," current regent chair Batson said. "In regard to unofficial communication, regents should not discuss information they have garnered in their regent service until it is already public information. The regents never want to cause confusion by talking over the university's official spokesperson."
Batson's view closely corresponds to a passage from the American Bar Association's Guidebook for Directors of Nonprofit Corporations, which Baylor's Office of General Counsel provided to the Line: "In the normal course of business, a director should treat as confidential all matters involving the corporation until there has been general public disclosure or unless the information is a matter of public record or common knowledge. The individual director is not a spokesperson for the corporation and thus disclosure to the public of corporate activities should be made only through the corporation's designated spokesperson, usually the chief executive or the board chair or in large organizations, a public relations officer."
It is possible that a regent's decision to act in contradiction to such expectations could result in his or her removal from the board. "A Director may be removed from his or her position as a Director only for cause and by employing the disciplinary procedure set forth in the current edition of Robert's Rules of Order Newly Revised," Baylor's bylaws state. "'Cause' is defined as any behavior that is inconsistent with the role of a Director. Such behavior may include, but is not limited to, a breach of a Director's fiduciary duty to the University, a breach of duties imposed on a Director by law, rule or regulation, including those imposed on the Directors by associations in which the University is a member, or a failure to meet expectations established by the Board of Directors. The removal of a Director may occur at a regular or special meeting of the Board of Directors, provided notice of intention to act upon the question of removing the Director has been stated in the notice of the meeting as one of the purposes of the meeting."
To date, no Baylor regents have been removed from the board for speaking about board matters to the public. But some regents have risked such punishment in the past out of a belief, they told the Line, that it was in Baylor's best interests. Such was the case in September 2003, when the five regents publicly stated what they thought the board ought to do at its upcoming meeting. A similar situation occurred in the mid-1990s during Fields's tenure as regent chair, when the university was in the process of determining its future relationship with the Baylor Health Care System in Dallas.
Admitting he had made "a huge mistake" in the way that Baylor explored the possibility of selling the Baylor Health Care System to a for-profit corporation--a move that generated a great deal of controversy in Dallas--Fields told the Line that he believes he was close to being removed as chair, and possibly as a regent, after he took what he considered a corrective action.
"At one point, pretty far into the situation, we decided to start negotiating with the Baylor Health Care System's board to resolve things," Fields said. "One day, I got a call from a reporter with the Dallas Morning News who wanted my comment on something they said they were going to print that I thought was very derogatory toward the health care system." Fields said he contacted the chair of the health care system's board, and they agreed to participate in a joint interview with the paper. "Both of us said we had made mistakes in a number of areas and that it was unfortunate it had come to this," he said. "We pledged to work together to make sure the situation was righted, whether that meant separation or staying together. When the story ran, I thought both sides of the story got out to the public for the first time, and I felt very good about that."
Fields said that when he attended the next negotiating session concerning the matter, he was taken to task by other regents. "They lit into me like I had killed Mother Teresa," he said. "'You talked to the press, and you shouldn't have,' they said. I said, 'Number one, I told the press the truth. Number two, I did it in the context of meeting with the health care system's chair to work this out.' The other regents viewed the situation as if a merger between two corporations were occurring and we had to be quiet about it because it involved the potential use of insider knowledge for financial gain, which is illegal. But this was not that situation. This was two family members who had gotten into a quarrel."
Page 2: A Broader Context
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