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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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