Governing for the future: Board leadership in a changing higher education landscape

By Lee Smith, Jaime Ontiveros, Adam Fennel, Jennifer Ramey, Robert Spencer

College and university board members carry the highest responsibility for guiding their institutions toward long-term success, ensuring alignment with their mission and the people that bring it to life through financial health, accountability, collaboration, and shared governance.
Board members must be proactive and forward-thinking, ask insightful questions, challenge assumptions, and help institutions anticipate risks and opportunities arising from new federal and state regulations, enrollment shifts, and accreditation challenges.
To govern effectively in this era of change, boards should focus on three critical areas: financial forecasting to prepare for fiscal impacts, building institutional resilience to adapt and thrive, and creating a clear strategic path forward to ensure sustained success.

Entrusted with the critical task of overseeing its long-term success and sustainability, college and university board members hold the highest level of responsibility within an institution. As stewards and fiduciaries, these individuals guide the institution toward fulfilling its mission and upholding its core values. In this vital leadership role, board members ensure the institution remains aligned with its strategic priorities by fostering financial health and maintaining accountability to internal and external stakeholders.

At the core of this responsibility is a deep commitment to shared governance, recognizing that true success comes from collaboration between the board, institutional leaders, faculty, students, and staff. While the board sets the broad direction and ensures the institution’s resources are managed effectively, it also actively supports and nurtures strong partnerships with the administration, working together to navigate challenges and pursue opportunities for growth.

Given recent federal directives and state actions that impact institutional governance and sustainability, these obligations have never been more critical. As issues emerge, such as indirect cost recovery (IDC) regulations, shifts in foreign enrollment due to changing visa policies, and potential accreditation challenges, it is critical for board members to ask presidents and institutional leaders insightful, forward-thinking questions.

In turn, this can help institutions challenge assumptions about the implications of regulations and explore the types of risks, institutional changes, and opportunities that may arise — and then use those insights to help guide timely decisions. Board members need to help ensure the institution is prepared to respond to what is ahead with a clear, forward-looking plan.

The future of the institution depends on boards and presidents working proactively together with foresight, agility, and a clear sense of purpose.”

The planning framework below outlines how the board can collaborate with institutional leaders to govern effectively during this time of unprecedented change. Key to this effort are three areas:

Financial forecasting

Assessing the potential impact of federal and state actions on the institution’s finances, predicting losses, and developing recovery strategies.

Questions for the president
Which federal directives or state actions are we monitoring, and how could they collectively impact our financial position in the next three to five years? How could specific scenarios — such as increased endowment taxes, reduced research funding, or cuts to Pell grants — affect our long-term financial stability? How are we incorporating industry shifts and peer institutions’ actions into our financial forecasts to stay competitive? How are we factoring deferred maintenance and capital renewal costs into our long-term financial projections, and what impact could they have on our budget?

Questions for the president

Which federal directives or state actions are we monitoring, and how could they collectively impact our financial position in the next three to five years?
How could specific scenarios — such as increased endowment taxes, reduced research funding, or cuts to Pell grants — affect our long-term financial stability?
How are we incorporating industry shifts and peer institutions’ actions into our financial forecasts to stay competitive?
How are we factoring deferred maintenance and capital renewal costs into our long-term financial projections, and what impact could they have on our budget?

Strategic outcomes
Multi-variable scenario modeling that evaluates the financial impact of federal and state directives Five-year financial projections, funding changes, and revenue fluctuations Risk analysis with P&L projections to assess long-term sustainability under various external conditions

Institutional resilience

The ability to anticipate and adapt to change, ensuring the institution can maintain its mission while seizing new opportunities.

Questions for the president
How are we managing liquidity in the current climate and identifying cash to address short-term needs? Which steps are we taking to strengthen our financial reserves and reduce reliance on unpredictable revenue sources, such as potentially decreased state appropriations? How are we evaluating the long-term viability of our academic programs and reallocating resources accordingly? What is our plan to manage rising costs, like labor, technology, and compliance, without compromising quality or access? How are we building flexibility into our budgeting and planning processes to respond quickly to sudden enrollment, policy, or funding shifts?

Questions for the president

How are we managing liquidity in the current climate and identifying cash to address short-term needs?
Which steps are we taking to strengthen our financial reserves and reduce reliance on unpredictable revenue sources, such as potentially decreased state appropriations?
How are we evaluating the long-term viability of our academic programs and reallocating resources accordingly?
What is our plan to manage rising costs, like labor, technology, and compliance, without compromising quality or access?
How are we building flexibility into our budgeting and planning processes to respond quickly to sudden enrollment, policy, or funding shifts?

Strategic outcomes
Identification of specific areas for cost-saving measures Detailed cash flow forecast to monitor liquidity Enhanced understanding of endowment and gift restrictions to expand allowable uses Emergency funding sources (e.g., establishing or optimizing lines of credit, loans, or quasi-endowments) Increased focus on alternative revenue streams Rationalization of certain “nice-to-have” services or offerings

Strategic outcomes

Identification of specific areas for cost-saving measures
Detailed cash flow forecast to monitor liquidity
Enhanced understanding of endowment and gift restrictions to expand allowable uses
Emergency funding sources (e.g., establishing or optimizing lines of credit, loans, or quasi-endowments)
Increased focus on alternative revenue streams
Rationalization of certain “nice-to-have” services or offerings

A strategic path forward

A road map that guides the institution through current challenges and positions it for long-term success, adapting to evolving circumstances as they arise.

Questions for the president
How are peer institutions responding to the current climate to strategically position themselves for long-term success? Which innovative strategies or initiatives are we leveraging to stay competitive in the evolving landscape? Which initiatives are underway to engage emerging student markets and new academic opportunities? How prepared are we to react to changes, such as personnel reductions or campus protests?

Questions for the president

How are peer institutions responding to the current climate to strategically position themselves for long-term success?
Which innovative strategies or initiatives are we leveraging to stay competitive in the evolving landscape?
Which initiatives are underway to engage emerging student markets and new academic opportunities?
How prepared are we to react to changes, such as personnel reductions or campus protests?

Strategic outcomes
Competitive strategies (e.g., improved or enhanced marketing strategies and new online programs) Non-traditional student populations targeted in recruitment efforts New initiatives (e.g., partnerships with tech companies) to tap into growing markets Clear action plan in the event of reductions (e.g., appropriate parties involved, policy and procedure protocols well understood, financial models that include severance, if applicable) Communications strategy Established protest response protocols and guidelines Plan for addressing resource imbalances across the institution Comprehensive compliance plan with regular updates and progress reports

Strategic outcomes

Competitive strategies (e.g., improved or enhanced marketing strategies and new online programs)
Non-traditional student populations targeted in recruitment efforts
New initiatives (e.g., partnerships with tech companies) to tap into growing markets
Clear action plan in the event of reductions (e.g., appropriate parties involved, policy and procedure protocols well understood, financial models that include severance, if applicable)
Communications strategy
Established protest response protocols and guidelines
Plan for addressing resource imbalances across the institution
Comprehensive compliance plan with regular updates and progress reports

The future of the institution depends on boards and presidents working proactively together with foresight, agility, and a clear sense of purpose. Those who challenge assumptions, make timely decisions, and innovate will position their institutions to thrive, lead, and shape the future of learning.