Who Owns Hamilton
by James Leach P'02
Hamilton President Joan Stewart's scholarship is rooted in the culture and literature of 18th-century France. Last year, as issues at the College commanded national and sometimes international headlines, President Stewart searched for European models that could help her explain to friends in France her relationship with the College's board of trustees. She found none.
"It struck me at that point that the role of trustee at a private college or university is quintessentially American," she said. "It helps explain why America has such a wonderful system of higher education."
Although the principles of non-profit trusteeship dictate some similarities among boards at the nation's private colleges and universities, it is also true that individual boards take on a character of their own, and that boards and institutions are often reflected in one another.
Trustees of non-profit organizations bear some responsibilities that are similar to those of trustees of for-profit corporations, such as ultimate fiduciary authority and the power to appoint the chief executive. But there are also notable differences in the approach of non-profit trustees. The most effective non-profit boards, for example, acknowledge that their responsibility is not absolute, but shared with the institution's other constituents. And then there is the matter of compensation: trustees of for-profit corporations are often handsomely compensated, while trustees of non-profits -- private colleges and universities in particular -- generally serve without compensation and, in fact, are often among an institution's most generous benefactors.
As Hamilton's vice president for communications and development, Dick Tantillo is charged with canvassing the alumni base and identifying potential members of the board. "We are interested in people who are passionate about the College and who bring different points of view and skill sets and professional experience to the table," Tantillo said.
A record of volunteer service and support of the College is a good indicator of "people who will show up and do the work," he added. "Hamilton trustees don't sign on just to attend quarterly meetings. They own this College in a way that makes them very much a part of the shared governance structure. They are the ultimate volunteers."
Richard Chait is professor of higher education at Harvard and author of three books on governance in colleges and universities. His most recent book, Governance as Leadership (written with William Ryan and Barbara E. Taylor), is the subject of a Q&A on Harvard's Website.
There, Chait explains how he sees the role of trustees changing, from what was typically "an oversight mechanism" to one "more concerned with a fusion of thinking between management and the board, where you have common concepts and focus." He sees trustees today not simply as fiduciaries, but also as strategists and as sources of leadership, working with an institution's management "in a new covenant that enables boards to be more engaged."
"The effort," says Chait, "is to harness the intellectual capital of all those talented, bright trustees that we go to great lengths to recruit, and make sure all these people have an opportunity to participate on difficult, complex, ambiguous questions."
The level of detail at which a trustee becomes involved in Hamilton operations often varies by committee assignment and trustee background.
Joel Johnson '65, chairman and CEO of Hormel Foods, brings his corporate experience to his role as chairman of the trustees' committee on budget and finance. With most lines in the Hamilton operating budget fixed from year-to-year, most of the fine detail of developing the annual budget happens in committee meetings on campus that involve members of the faculty and administrative staff, with input from students. The trustee budget committee meets with members of the on-campus committee to review that detailed budget from a longer perspective. The trustees are more likely to test general assumptions or look at long-range trends than to question individual line items.
"Joel and the members of his committee ask hard questions and they give good advice," said Karen Leach, vice president for administration and finance. "If we haven't thought an issue through they are quick to smell it out and say, 'We don't think you're there yet.' That's what I like. The trustees have the historical and outside view. They are the checks and balances on our processes, and they bring great wisdom. These are brilliant people."
Meanwhile, members of the board's committee on investments are much more active in the day-to-day process of determining how the College's endowment will be managed. Co-chairs Charles Svenson '61 and Henry Bedford '76, working with the College's investment officer Pete Blanchfield, are the latest in a succession of trustees who have helped oversee the growth of the endowment from $450 million to $600 million in the past four years. Their efforts place Hamilton among the top 10 in college and university endowment performance nationally.
In addition to regular trustee meetings, the investment committee meets four times a year in New York City and twice on the Hill. Trustee members help select professional money managers, review investment strategies and evaluate portfolio managers. Blanchfield provides the due diligence such as reviewing managers' performance, but members of the investment committee are involved in the process at every stage.
Hamilton's investment in buildings and grounds -- $110 million during the past 10 years -- is another example of the magnitude of trustee responsibility. "Once a building plan is approved by the planning committee, the buildings, grounds and equipment (BG&E) committee takes it through construction," Leach explained. "They ensure that a building will meet its envisioned function and fit into the campus architecturally. Plus they make sure it is built with quality materials that will endure.
"Trustees have important input on all aspects of construction including architect selection, the size and location of the building, the exterior materials and tradeoffs that will be made to achieve the project budget," she added.
Currently chaired by Stephen Anthony '59, the BG&E committee routinely travels with faculty members to peer colleges and universities where they review recently completed facilities to gather ideas, as was the case for such projects as the new Science Center and the anticipated Kirner-Johnson renovations. "Faculty committees are always involved, beginning at the front end of the process," Anthony said. "They are an essential part of the planning, which helps ensure that the places they will be teaching in meet their expectations."
The role of trustees in non-profit organizations in the United States is determined to some extent by federal law. To encourage the formation of private organizations that serve the public interest without seeking profit for particular owners, the government offers incentives, perhaps the greatest of which are a tax exemption and the right to receive tax-deductible donations. In exchange for those concessions, the government charges non-profit boards with seeing that their organizations honor their mission and objectives.
Private colleges and universities exist as a viable and complementary alternative to government-funded higher education in the United States largely because of those tax concessions. This provides for a system of higher education that is widely acknowledged to be the richest and most diverse in the world.
The role of trustees and the broad mission of non-profit organizations are delineated in their agreements with pertinent government agencies. Hamilton College's mission ("for the instruction and education of youth in the languages and liberal arts and sciences") and the composition and role of its board of trustees, are contained in the charter and subsequent amendments originally granted on May 26, 1812, by the Regents of the University of the State of New York.
The 1972 amendment to Hamilton's charter, one of several adopted since the initial approval in 1812, reiterated that Hamilton's board is "a nonstock corporation organized and operated exclusively for educational purposes," and further stipulated that, "In the event of the dissolution of the corporation, [subject to appropriate approvals], all the property and assets of the corporation shall be distributed to such other nonprofit educational institutions or organizations as shall be determined by the trustees of the corporation."
To the question, "Who owns Hamilton?" then, the answer is technically and legally the board of trustees. But, at Hamilton as at private colleges and universities across the country, the trustees have long understood that their organizations continue and thrive because of a shared sense of ownership among constituencies that include students, administrators and, above all, alumni and faculties.
Wise boards find ways to recognize and allow for the roles that are played by those various groups and further to choose their members and to manage their business in ways that represent those with a stake in the College.
Hamilton's Chairman of the Board Stuart Scott '61 is enthusiastic about private higher education and about small liberal arts colleges in particular. "Unlike large universities, small private liberal arts colleges are an American institution that doesn't have a counterpart elsewhere in this abundance.
"These institutions can't exist without private support," Scott added. "The only way they can exist is by having loyal alumni who learn to love this kind of institution, and their institution in particular, and are willing to work and give money so that these institutions can prosper."
The best trustees, said Scott, "recognize that a college is not the same as a company; they are willing to be open and receptive to the faculty and administration and to allow some disruption that a business might not tolerate. That's all part of shared governance. It is good for the board to know and understand a new curriculum, for example, but the faculty needs to do that curricular work."
The process of selecting a president is one example of the board reaching out for input from the campus. While choosing a president is clearly a board prerogative, the search committee for President Stewart included representatives from the student body, staff and faculty.
Committee work often provides opportunities for trustees to meet with students and members of the faculty. The board's committee on business and finance, for example, meets with the on-campus budget committee, which includes both students and faculty members.
Meeting on campus quarterly also places the trustees in regular contact with students and professors. In addition to casual contacts with members of the campus community during the normal course of their meetings, the trustees often get together with students over lunch. And some members of the faculty arrange informal dinners in their homes where they are host to visiting trustees.
It is also the case that the sons and daughters of trustees occasionally enroll at Hamilton, creating not only a familial link, but also ties with a circle of student friends. Two of Chairman Scott's offspring have attended the College, which he said has helped keep him "in touch with the student point of view."
As stipulated by the Bylaws of the Board of Trustees, Hamilton's board comprises 36 voting members: 24 charter trustees and 12 alumni trustees. The board elects charter trustees for renewable terms of six years each. The president of the College serves as a charter trustee. The Alumni Association of Hamilton College -- encompassing all graduates -- elects the 12 alumni trustees, three of whom are chosen each year for four-year terms that are not renewable. The Bylaws stipulate that charter and alumni trustees must retire at age 70. The Bylaws also allow for the election of "life trustees;" 27 persons currently serve in that non-voting capacity.
Twenty-one of Hamilton's 24 current charter trustees previously served as alumni trustee. Adding the 12 alumni trustees, 33 of the 36 voting members of the current board are Hamilton or Kirkland graduates, underscoring the College's reliance on and recognition of alumni service. While in most years alumni affirm the candidates for alumni trustee that are presented by the alumni council, the council's bylaws allow additional candidates to petition for a place on the ballot, as happened in the most recent election.
With a membership of 230-plus, the alumni council ensures a broad representation of alumni involvement in the College. Class presidents, elected by their classmates, account for approximately 55 members of the council, and with class agents assure that voices will be heard from across all class years. The presidents of regional alumni associations, about 40 in all, bring geographic representation to the council, as do regional representatives from graduates of the last decade (GOLD). The council meets on campus twice a year, and at least one of those meetings coincides with one of the trustees' four annual on-campus meetings, allowing for interaction between the groups.
At any time, the council's nominating committee may have upward of 60 names under consideration as potential alumni trustees. Tantillo, along with Alumni Secretary Dean Abelon, staffs the alumni council's nominating committee as its members assess candidates' commitment to the College.
That commitment is most often demonstrated by voluntary involvement in such areas as admission, career planning, development and alumni service, as well as through philanthropy. "We constantly ask ourselves, 'Do we have the right mix of alumni represented?' Clearly a priority is to increase the number of women, alumni from diverse ethnic backgrounds and representation across class years," Tantillo said. "But first and foremost, you won't see an alumni trustee who hasn't been passionate about the College for many years."
An old saw holds that the criteria for non-profit trusteeship are "wealth, work and wisdom," in variable proportions.
Jeff Little '71 served as alumni trustee before being elected charter trustee in 1996. He chairs the board's nominating committee, which places a premium on involvement with the College, both financially and in time and expertise. "It's a job we all love," said Little, "and we all want trustees who are committed and who show that commitment in different ways, not just financially, but with their time, their brainpower and their experience."
At Hamilton as at all private colleges and universities, a board's single most important role is acknowledged to be selecting, and then supporting, the president. Life Trustee Elizabeth McCormack brings to the Hamilton board the perspective of having served not only as a trustee of several other nonprofit institutions, but also of having served for eight years as president of Manhattanville College.
"The main responsibility is to make sure the CEO knows how to be president," she said. "Then the board's role becomes supporting the president. That doesn't mean not asking the tough questions and being critical, but being supportive. If the board can't do that, it has only one alternative."
President Stewart adds another point of view to the notion of presidential selection. Her interactions with the board during the presidential search were key to her joining the College, she said. "I was so impressed by their discernment, their articulateness and their love of Hamilton. It influenced my decision."
Between board meetings, the president is in frequent contact with trustees, both through committee work and as a function of calling for advice and support. "I keep in touch, and the trustees always come through," she said. "There hasn't been a conversation that hasn't helped me to understand the complexity of a situation."
Communication between the president and the trustees, while always important, is critical in times of crisis. "It would be difficult to survive if a board were not supportive. I saw that clearly dealing in the difficult times we've been through. The board's support was sustaining," Stewart added.
Chairman Scott observed that in the midst of last winter's issues, "President Stewart was able to keep her hands steady on the tiller because she knew she had our full support, even during turbulent times. The trustees provided the president with a reliable place to stand when the storm was at its height."
McCormack believes that a trustee's motivation for being on the board often determines what kind of trustee he or she will be. "People serve on the Hamilton board because they love their college and they are grateful for the education they received," she said.
Life Trustee Kevin Kennedy '70, who came to the board as an alumni trustee and served as the trustee chair for eight years, reflected that sentiment: "When I graduated I walked away from Hamilton saying 'I grew up here. I became a little more mature here. I got myself pulled together here.' I loved it. My professors were extraordinary. I've always felt that it was exactly the kind of place that everybody should have the chance to experience.
"I consider it an extraordinary privilege to have the opportunity to serve as a trustee of Hamilton. I've been enriched by having been involved with the College not just as a student, but also as a trustee. As an active alumnus, it's one of the most satisfying experiences I've ever had."
Jim Leach is a former vice president of communications and executive assistant to the president at Colgate University.