Dear Chancellor Rodrigues:
As you know, during my review of the nomination of Dr. Stuart Bell by the UF presidential search committee, pursuant to board of governors regulation 1.002, I observed a departure from BOG regulation 1.001 pertaining to powers and duties of trustees. Specifically, the contract for interim UF president Dr. Don Landry included provisions granting the trustee chairman sweeping authority to approve the hiring and compensation of university personnel, from the provost down to mid and lower-level unit academic and administrative unit leaders.
Regulation 1.001 is unambiguous; the powers of chairs and trustees are limited in scope and there is no provision for a chair making personnel decisions that are within the purview of a president. This is an unusual delegation of authority to a board member, and appears to be non-compliant with 1.001 of our regulations. Elsewhere, there is at least one regulation which provides specific and limited permission for the chair to be designated additional responsibility, so it is plain that when the BOG has intended to expand the powers of the chair, it has done so. Otherwise, the expectation is that the provisions of 1.001 should be followed.
I shared this concern with Chair Hosseini, and appreciate that he agreed to remove such language from future contracts, which was an important consideration in allowing Dr. Bell to proceed as a candidate for consideration by the trustees.In light of these concerns, I asked BOG staff to conduct a preliminary review of governance at each of our 12 universities for the purpose of ensuring compliance with 1.001 - a critical issue given the provisions of this regulation provide the basis for our governance standards. I appreciate the responses received to date.
The preliminary review heightened my concerns, as it reveals that some universities appear to have issues of non-compliance in which the chairs have been delegated authority beyond what our regulations permit. Notably, most of our universities are compliant, indicating a clear understanding of the regulation. With respect to UF, while chair Hosseini agreed to remove the offending language from the president’s contract, I learned through this review that elements of this language, and significant other delegations of authority, have been granted to the UF board chair which involve financial, contractual and other delegations that I feel are problematic, inconsistent with best practices in governance and which again seem to run afoul of our regulation. The fact the offending language will likely be removed from the president’s contract is rendered meaningless if the university’s governance standards, which are a policy of the board of trustees, remain out of compliance.
This issue is important, as each board member must exercise their fiduciary duty, and cannot abdicate these responsibilities by giving them away to anyone, other than limited delegations of authority to the president, which our regulation supports. The president reports to the full board of trustees, which must act as a body. There is no provision in our regulations which permits boards to delegate authority to a single board member, including the chair, for financial decision-making, personnel decision-making, contract or procurement decision-making or any other material decisions which are ultimately fiduciary duties of the board of trustees. One board member may not substitute his or her judgment for that of the other duly appointed board members.
The provisions of our approach to governance were based on an analysis of governance best practices which were shared with the trustees in 2017, and those provisions remain the guidepost for why our regulations exist. Nowhere in this guidance does it recommend or support such broad delegations of authority to a single board member. It does encourage consultation with the chair on material issues, something which is, in fact, a best practice for a chief executive. I have provided a copy of this document with this email.
Importantly and unfortunately, when a single board member has improperly been granted such authority to act outside of our regulation, this increases the likelihood that questions may arise about the propriety of decisions that are made. Since January, and more recently, media stories and at least one statewide elected official have raised such questions.
Accordingly, I believe the following steps are appropriate:
1. Because I strongly believe the governance issues are crucial and must be resolved immediately, and in accordance with provisions of the BOG operating procedures, I will not approve placing any item on the agenda for a university while that university’s board is out of compliance with Regulation 1.001. This will impact any issue requested for the agenda for next week’s meeting, including consideration of the nomination for Dr. Bell as president of UF, but also president Timur’s reappointment at FGCU and at least one facilities committee request for UF. I realize this may create some controversy, but that is not the intent. Dr. Bell deserves the opportunity to have his nomination considered on the merits, based upon his established track record and his presentation before the BOG. To be clear, this action should not be construed by anyone to be a statement about Dr. Bell or his candidacy. Similarly, President Timur deserves to have her full reappointment considered based upon the merits and her accomplishments at FGCU. I recognize Dr. Timur’s contract expires at the end of June. Therefore, I am approving the inclusion of a 3-month extension for Dr. Timur by the BOG for next week’s agenda, and would be pleased to add the consideration of her full extension at such time as FGCU’s board addresses the compliance with 1.001.
2. I am prepared to call a special meeting of the BOG to agenda these issues at such time as these governance issues are resolved.
3. With respect to certain allegations made involving real-estate and financial transactions at UF, some of which has been reported in various media, I am asking the BOG inspector general to review any credible allegation which may provide factual information to the BOG for our purposes of monitoring governance, and to make any recommendations she feels appropriate. The BOG inspector general operates independently under the oversight of the Audit and Compliance Chair and the committee, and may use her discretion to determine the breadth and scope of her review based on the credibility of the information. For visibility, our role is to understand if the facts support that any BOG regulation has been violated, if any inappropriate action has occurred as a result of a BOG regulation being violated, or if there is a need for any action by the BOG or the board of trustees. And I would caution that no-one should draw any conclusions from the mere fact there is a review being conducted. This review should be conducted as swiftly as possible, and the results reported to the Audit and Compliance Committee. I ask the Chair of the Audit and Compliance Committee to zealously protect the independence of the Inspector General and to ensure that no one interferes with her work or attempts to influence the outcome. Any attempted interference should immediately be reported to me and to the Chancellor.
4. I am asking you and staff to work with each university to offer guidance in reviewing their governance standards to ensure compliance with the relevant provisions of Regulation 1.001.
5. Finally, at next week’s Nomination and Governance committee meeting, I would like for the general counsel to share the results of her preliminary review of governance, and for us to have a discussion about it. I believe it would be appropriate to discuss further enhancements to our regulation, including but not limited to:
1. Adding a statement about fiduciary obligations of individual board members
2. Underscoring that boards of trustees must act as a body, and not through the actions of individual members. A best practice of governance is what is often referred to as a “non-interference” provision, which typically states that, other than for purposes of inquiry or information, individual board members may not direct, supervise, or interfere with the day-to-day administration of the university". Further, “the authority of the board of trustees exists only when acting collectively as a board in accordance with each’s fiduciary obligations, applicable law, regulations and board policies.
3. Refining the provisions related to term limits of chairs.
4. Increased specificity related to delegation of authority for chairs to negotiate presidential contracts, but with final approval by the trustees in a publicly noticed board meeting.Members of the BOG and staff may have other ideas, which would be welcome.
Thank you.
