Flawed by design: Why Penn State’s recent governance reforms won’t work and what should be done instead Harvard Case Solution & Analysis

By 2017, higher education is anticipated to be a $2 trillion industry worldwide. Within this huge economic engine, the boards of trustees that offer government to colleges and universities face a complicated challenge since they have to serve a variety of stakeholders. Without effective governing, an academic institution's performance is likely to be compromised. Penn State University is harassed by an inefficient board of trustees. As a complement to previous work that has documented this board's unwise and expensive selections, we analyze how five design problems--board size, board composition, fiduciary duty, term limits, and transparency--helped develop a culture in which inefficient selection were more likely to happen. We discuss the board's recent self-imposed reforms are inadequate.

We subsequently offer more substantive reforms which could repair the Penn State board's flaws. More generally, other academic boards might reap the benefits of undergoing a self-analysis based on the Penn State instance.

PUBLICATION DATE: January 15, 2015 PRODUCT #: BH643-HCB-ENG

This is just an excerpt. This case is about LEADERSHIP & MANAGING PEOPLE

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Flawed by design: Why Penn State’s recent governance reforms won’t work and what should be done instead

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