North Carolina State University
SACS Compliance Certification
August 15, 2003

Core Requirements 2.2 (governing board)
The institution has a governing board of at least five members that is the legal body with specific authority over the institution.  The board is an active policy-making body for the institution and is ultimately responsible for ensuring that the financial resources of the institution are adequate to provide a sound educational program.  The board is not controlled by a minority of board members or by organizations or interests separate from it.  Neither the presiding officer of the board nor the majority of the other voting members of the board have contractual, employment, or personal or familial financial interest in the institution.

 

Compliance
North Carolina State University is in compliance with this requirement.

 

Explanation
As a constituent institution of the sixteen-campus University of North Carolina system, NC State University is under the authority of two governing boards: the Board of Governors of the University of North Carolina (BOG) and the Board of Trustees of North Carolina State University (BOT).  Both boards cooperate to satisfy this requirement. 

Both boards are active policy-making bodies: The BOG meets twelve times per year, and the BOT meets five times per year. The BOG is specifically required to make financial policy.  The Code of the Board of Governors, the primary governing document of the University of North Carolina system, forms the cornerstone of The Policy Manual of the University of North Carolina, which provides overall guidance for each constituent institution, including NC State University.

NC State University’s immediate governing board is the BOT.  Its authority for governance is provided by NC General Statute 116-33, which states that the BOT’s powers and duties are defined and delegated by the BOG.  NC General Statute 116-11(13) also allows the BOG to delegate its authority to the BOT or, through the president of the University of North Carolina, to NC State University’s chancellor. 

The BOG is charged by statute with planning and developing a statewide, coordinated system of higher education (NC General Statute 116-11(1)).  By law, the BOG is responsible for determining, managing and governing the affairs of the member institutions (NC General Statute 116-11(2)).  This includes ensuring that financial resources are available for each institution’s educational programs.  NC General Statute 116-11(9) requires that the BOG present a recommended budget for the university system and the member institutions to the governor, the Advisory Budget Commission and the North Carolina General Assembly.  The BOG also disperses funds to the member institutions.

As the requirement further stipulates, NC State University’s governing boards are not controlled by external interests or by a minority of board members.   

First, procedures governing the election and appointment of members insulate the BOT against external influences.  Of the BOT’s thirteen members, eight are elected by the BOG, four are appointed by the governor of the state of North Carolina, and one is ex officio, the president of NC State University’s student body.  Except for the student body president, members of the board serve four-year terms and are limited to a maximum of two successive terms in office (Section 1.1 of the BOT bylaws).  Moreover, the terms in office overlap.  In odd-numbered years, the BOG elects four persons to the BOT and the governor of North Carolina appoints two persons to the BOT. 

Likewise, the BOG follows similar election procedures to shield itself from external influence.  The thirty-two voting members of the BOG are elected by the North Carolina General Assembly and serve four-year terms.  Half of the board is elected every two years.  Section 200B of the Code of the University of North Carolina lists these and other rules concerning election to the BOG. 

Second, both the BOG (Section 202 C.) and the BOT (POL 01.05.1) require a majority of members to be present before conducting business.  As specified in the bylaws, proposed actions must be authorized by majority vote, thereby preventing domination by a minority of members.  

Finally, as the requirement indicates, the members of NC State University’s governing boards do not have contractual, employment, or financial interests in the university. 

Members of the BOG cannot be employed by the university, the state or hold state office.  Section 200 B. 2c of the Code disqualifies for membership any “member of the General Assembly or officer or employee of the state or of any constituent institution or spouse of any such member, officer, or employee….”       

This policy is mirrored in the bylaws of the BOT, which state that “No member of the General Assembly or officer or employee of the State or of any constituent institution of the University of North Carolina or spouse of any such member, officer or employee shall be eligible for election or appointment as a member of the Board of Trustees” (Section 1.1.5). 

Just as the members of the governing boards are required to eschew university employment, they are prohibited also from having contractual or other financial interests in the university.  Members of both boards are subject to the BOG policy on “Dual Memberships and Conflicts of Interest” at section 200.1 of the Policy Manual of the University of North Carolina.  Moreover, NC General Statute 14-234 prohibits members of either the BOT or BOG from being involved in business transactions with companies in which they have a financial interest.  The same statute provides criminal penalties for “self-dealing.”

Supplementary Information
Other issues relating to financial interests and conflicts of interest are addressed in Comprehensive Standards: Institutional Mission, Governance, and Effectiveness #4.

In addition, BOT policies are posted online by the NC State University Office of Legal Affairs.

References


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Last Modified: Wednesday, 02-Sep-09 15:18:45