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With Educational Institutions, the Right Board of Trustees – and Frequent Communication With Them - is Essential

August 15, 2011

By John A. Zinno, Jr., CPA

With educational institutions, it is imperative that there not be a disconnect between the Board of Trustees and the financial office.  Without regular communication between the board charged with overseeing the institution and the fiscal officers charged with keeping the books, problems can occur.  It has never been more important that these two parties be on the same page, in regular contact and fully familiar with the institution’s financial health.

The truth of the matter is, when it comes to trustees for educational institutions – including independent schools, colleges and universities - it is no longer just about creating a budget each year and then having little engagement for the next 11 months.  Being a member of a governing board today means much more responsibility than what was once expected.

Why?  Because in a financially challenged economy where every dollar counts – especially with increased pressures on tuition rates, the demand for financial aid, lack of availability to credit and reductions in charitable giving – the pressure to preserve financial stability while maintaining a top quality educational experience is that much greater.

The “old way” of doing things, when it came to someone acting as a trustee for an educational institution, was more hands-off.  The environment was reactive rather than pro-active.  Board members dealt with issues as they arose, but were less focused in terms of long-term strategic planning and routine financial assessments.  These days, such activities are essential in order to keep an institution running soundly.

What this increased responsibility for trustees translates to is a need by these institutions – more now than ever before – to have the right people serving on the boards.  It is essential that the boards have a rock-solid presence of highly qualified people from the business world with strong financial backgrounds who understand their fiduciary responsibilities as trustees.  This way, a school will have a board populated with people who know the necessity of being in close contact with the institution’s financial office.

The Board of Trustees should be assembled for use as a vital resource in terms of financial planning and governing, a pool of individuals whose expertise and talents in the business world can be tapped into on an ongoing basis. 

Some characteristics of ideal board members are:

  • Strong communication skills and a hands-on approach
  • A track record of fiscal expertise and success
  • An ability to think and act strategically
  • Sound knowledge of what the Return On Investment (ROI) should be
  • A willingness to periodically assess and examine the institution’s fiscal health
  • A vision for the future, 5-10 years down the line

In many instances, the risks of not having a well-qualified board regularly engaged at an educational institution are too high. Those institutions, without large endowments to assist in offsetting some of these economic pressures, could experience severe financial distress without a strategic approach and active board involvement.

While it may seem antithetical to the “old-fashioned” idea of 20 years ago, where trustees met less frequently, the truth is the more frequent contact a board has with the financial office, the better off the institution will be.  It is common practice in today’s environment for trustees to engage in regular conference calls with management, as well as the sharing of information through emails, webinars and dashboards to gauge progress.

More than ever, a successful partnership between the administration and trustees is a seamless one.  In terms of risk management, fundraising, long-term planning, approach to capital expenditures and debt service, the two parties must work together strategically in order to lead the institution’s advancement and reputation in the markets it needs to reach.

Educational institutions, as they frequently look to fill trustee positions, should steadily be on the lookout for the most qualified individuals, the ones they know are not only willing and ready to serve, but who also bring impeccable credentials of business and financial know-how to the table.  This is the proper way to constitute a strong Board of Trustees in today’s financially challenging environment, and doing so should mean great value to an institution, both short- and long-term.

John A. Zinno, Jr., CPA, is a partner with BlumShapiro and the firm’s Director of Services to Educational Institutions.  BlumShapiro is the largest regional accounting, tax and business consulting firm based in New England, with offices in West Hartford and Shelton, CT and Rockland, MA.  The firm serves as business advisors for today’s leading companies, non-profit organizations and government entities, working to strategically tailor and consistently deliver tested solutions for unlocking an organization’s full potential.  For more information about BlumShapiro, visit


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