In recent years, governing boards of Michigan’s public universities have moved from relative anonymity to the public spotlight. Leadership turnover, high-profile controversies, and disagreements among board members have drawn renewed attention to the role these boards play in directing some of the state’s largest universities. Additionally, Michigan’s constitutional framework for university governing boards makes this attention especially significant.
Michigan is unique in that the boards of Michigan State University (MSU), the University of Michigan (UM), and Wayne State University (WSU) are elected by the people, while the state’s other public university boards are appointed by the governor.1 This unusual system presents important questions about the nature of board service. Board members are elected through a political process, yet their primary obligation is to the institution, serving as fiduciaries who are entrusted with safeguarding the institution’s long-term interests. Understanding this framework is essential for anyone researching university governance in Michigan.
My goal with this article is to provide legal researchers with a survey of the principal sources that define the responsibilities of Michigan’s constitutionally established university boards. The survey begins with the Michigan Constitution, then examines the sources that inform board members’ fiduciary obligations, and finally highlights university bylaws and governing documents. While no single document comprehensively defines the role of university board members, these sources, considered together, provide a structure for understanding university board governance in Michigan.
CONSTITUTIONAL AND STATUTORY PROVISIONS
The Michigan Constitution is the foundational source for understanding university board governance in Michigan.2 Article 8 establishes each governing board as a “body corporate” and grants it general supervision of the institution, control and direction of expenditures, and authority to appoint the university president.3 Additionally, the constitution provides for how board members are selected, either by gubernatorial appointment or by election, depending on the institution.4
Although the Constitution does not define the term “body corporate,” the term reflects an important principle of board governance: Authority is vested in the board collectively, not in individual board members.5 The board acts through formal meetings and official actions, not through independent decisions or public statements by individual members. Therefore, individual board members are authorized only as participants in the board’s collective decision-making process.6
As noted above, the Constitution grants governing boards broad oversight and authority over institutional matters. They serve as stewards of the university and, in fulfilling this role, have a fiduciary duty to the institution they oversee. While Article 8 defines the board’s authority, it offers little guidance on how board members exercise that authority in the context of their fiduciary duties. To better understand these duties, it is helpful to look beyond the Constitution at general principles of fiduciary responsibility, as well as specific bylaws and governing documents adopted by each university.
SOURCES DEFINING BOARD MEMBER FIDUCIARY DUTIES
Because Article 8 does not explicitly define the board’s fiduciary duties, other authoritative sources can help the legal researcher understand the parameters of these duties. These sources include analogous corporate governance principles, influential guidance published by the Association of Governing Boards of Universities and Colleges, and university governing documents.
Michigan corporate law serves as a good starting point to understand the overarching fiduciary duties of university board members. Section 450.1541a of the Michigan Business Corporation Act codifies the traditional board duties of loyalty and care, requiring directors to discharge their duties “in good faith” and “with the care an ordinarily prudent person in a like position would exercise.”7 Consulting case law interpreting this provision is an important next step in understanding how Michigan courts have applied and interpreted these fiduciary duties.8 A comprehensive review of that case law is beyond the scope of this article. However, it is worth noting that while Michigan courts have addressed the powers of university governing boards,9 they have not explicitly articulated the fiduciary duties owed by university board members.
Michigan law provides limited direction on how fiduciary principles apply to the day-to-day governance of public universities. Accordingly, another valuable resource for researchers is guidance issued by the Association of Governing Boards of Universities and Colleges (AGB).10 AGB maintains a web page devoted to fiduciary duties that links to numerous governance sources.11 Two particularly valuable publications are AGB Board of Directors’ Statement on the Fiduciary Duties of Governing Board Members,12 and Consequential Boards Adding Value Where It Matters Most.13 Both identify the fiduciary duties of university board members as the duties of care, loyalty, and obedience, and also provide practical advice for translating those fiduciary duties into effective board governance.
Although AGB’s publications provide valuable guidance on governance best practices, researchers should also consult governing documents adopted by each university’s board. Board bylaws, codes of conduct, and related governance policies illustrate how these fiduciary principles are implemented at the institutional level.
The governing documents for MSU,14 UM,15 and WSU16 are publicly available on each institution’s website. These materials acknowledge the board’s fiduciary responsibilities in different ways, including through bylaws, policy statements, and codes of conduct. All three institutions maintain conflict-of-interest policies applicable to board members,17 while MSU and WSU have also adopted board codes of conduct that more fully articulate expectations regarding fiduciary responsibilities and ethical governance.18
CONCLUSION
Developing a better understanding of the roles and responsibilities of Michigan’s university boards requires consulting a mix of primary and secondary sources. By bringing these sources together, this article provides a practical starting point for researching university board governance in Michigan.