ITEM 119-116-R0503�� Attachment




I just returned from a two-day conference on trusteeship sponsored by the Association of Governing Boards.� One topic of special interest at the conference was a discussion of institutional ethics and values.


It was acknowledged that trusteeship of a college, university, or System of higher education units is at once a high honor and a serious responsibility.� It was stressed that it is our board�s responsibility to see that our units comply with the law, represent themselves truthfully, deal fairly with individuals, treat the environment with respect and care, and take seriously our leadership role in our System�s pursuit and guardianship of truth.


Before I left for the conference, I wrote and forwarded the below message to some of our group.� I solicited input, as I will do now.� I am concerned that with the shifting of revenue sources, there is a potential for some groups or corporate entities to state their case to our board with such passion, urgency, or desire to do business that at times the truth is shaded, modified, or essential information is omitted.� Because of the comparative manner in which data may be used, each group generally wants to �put its best foot forward� in its self-descriptions�sometimes to the point of representing itself inaccurately.


It is essential that the institutional community have confidence in and respect for the board�s commitment to integrity.� As the final authorities for our system, we are fully responsible to develop and maintain a reputation for ethical propriety and we are seen as being responsible for all �official� conduct.


Some true examples given at the conference of ethical lapses included:

         Having announced that all available spaces in an entering class are filled, a university agrees to admit another student after the student�s parents make a substantial contribution.

         An institutional executive and the institution�s auditor repeatedly assure that a bank loan to the executive is being repaid progressively when, in fact, not a dollar has been paid back.

         An officer of a university signs a lease for the institution, claiming sufficient authority, when bylaws clearly retain that authority for the board.

         Several colleges publicly acknowledge fabricating data about admissions applications, graduation rates, and average admissions test scores to achieve higher marks in magazine publisher�s competitive rankings.

         An institution whose conference membership and self-declaration require that it give no athletic scholarships creates new �leadership� scholarships that go to students with demonstrated athletic prowess.


Such cases are not rare and confirm we are not insulated from serious infractions committed in our corporate name, or from employing persons capable of serious moral and ethical lapses.� Money, greed, pride, unbridled ambition are human traits that are present everywhere.�


At our May meeting, Laurie Neils will provide the board a review of financial activities to ensure our full understanding and approval of our procedures.� The intent is to preclude our board from acting like the Enron board, who claimed they had no knowledge of various procedures that turned out to be disastrous.� Ambiguous financial procedures can destroy the hard-won reputations of individual board members and our System.� The cornerstone of any board�s assurance of financial responsibility is the external audit.� I submit Laurie�s presentation and our subsequent understanding will be essential to our effective governance of the Montana University System.


Integrity has a short shelf life.� Our reputation of effective governance of the Montana University System earned over a long period of time and with much volunteer devotion can be cancelled out quickly by ethical missteps or breaches of truth.� In view of this, the AGB conference recommended each board have an explicit statement of its commitment to honesty and integrity.� The conference encouraged boards, as the corporate entities entrusted and empowered to encourage responsible citizenship, to include in the statement an explicit commitment to comply with laws and keep faith with commitments.� Our by-laws should identify clearly those individuals who have the authority to obligate the institution along with any limits on that authority.� The conference further encouraged boards to include an explicit statement mandating accuracy in all self-reporting and self-descriptions and acknowledge that our System must be truthful in all dealings.�


The consensus of the Conference was that Regents, as keepers of the public trust, must have a clear understanding of their legal responsibilities, remain aware of the interests we represent, and assert ourselves collectively in self-regulation that protects the entire board, individual members, and our System.� True examples were given of institutions that became progressively more accurate as the consequences of misinformation became more severe.


Clearly, any willingness to provide inaccurate, exaggerated, or unsupported data will undermine our board�s desire to promote a culture of integrity.� For all these reasons, I will bring to the May meeting a proposed statement for adoption that reflects our board�s commitment to integrity, accuracy and honesty throughout our University System.� We may wish to include this statement in our by-laws or by other means such as a resolution.� Discussions at the Conference indicated that a board that is careless with facts, allows inappropriate representations, or is unwilling to maintain our commitments�jeopardizes the collective character of all institutions comprising our System.� I am not trying to correct an existing problem; I am only proposing an emphasis on integrity now, before shifting funding patterns do encourage breeches in our institutional ethics.


I solicit your comments or suggestions that will be incorporated in our discussion of this issue at the May meeting.