GUIDANCE RELATING TO GOVERANCE PRINCIPLES -
Fiduciary Duty
SECTION 4(1)(b): The institution has a governing board of at least five members that exercises fiduciary oversight of the institution.
SACSCOC does not define “fiduciary” in The Principles of Accreditation nor does it provide a definition in its Resource Manual. In order to understand what “fiduciary” means, boards for institutions of higher education frequently look to The Association of Governing Boards of Universities and Colleges (AGB) for guidance.
In 2015, the AGB's Board of Directors issued a statement on the fiduciary duties of governing board members. In that statement, the AGB included the following guidance2:
“Under state statutory and common law, officers and board members of corporations (including nonprofit corporations and public bodies that operate colleges and universities) are fiduciaries and must act in accordance with the fiduciary duties of care, loyalty, and obedience.”
“A fiduciary is someone who has special responsibilities in connection with the administration, investment, monitoring, and distribution of property—in this case, the charitable or public assets of the institution. These assets include not just the buildings and grounds and endowment, but also intangibles, such as the reputation of the institution and its role in the community.”
“Fiduciary duties will apply by law even if an institution does nothing more to implement them, but governance is improved when board members and presidents share a mutual understanding of the standards that define the fiduciary role, including the balancing of interests necessary to carry out the institution’s mission and strategic priorities.”
With that statement, the AGB Board of Directors also issued a list of core principles. These core principles have been set forth below and will be helpful in guiding board members in the execution of their duties.
CORE PRINCIPLES FOR EFFECTIVE BOARD CONDUCT AS FIDUCIARIES
1. FULFILL THE FIDUCIARY DUTY OF CARE BY:
Acting at all times in good-faith and with the appropriate diligence, care, and skill required under the circumstances.
2 AGB's Board of Director's State on Fiduciary Duties of Governing Board Members. https://www.acb.org/sites/default/files/u27174/statement_2015_fiduciary_duties.pdf
4 of 8