There was a dramatic moment when, on a quiet Sunday in early June, vice-presidents and deans at the University of Virginia were summoned to an almost unheard-of audience with the board of visitors, the public university's governing board.

The board had decided that Virginia's president of two years, Teresa Sullivan, was not moving quickly enough to address challenges such as lagging faculty salaries, rising tuition fees and the need to expand into online education. Helen Dragas, the university's rector and chair of the board, told the stunned administrators that it had asked for, and received, Sullivan's resignation.

The events set in motion by that action dominated higher education news in the US for 16 days, during which time the academic faculty and board of one of the nation's most prestigious universities engaged in a bitter and highly public power struggle.

The academics won, and Sullivan was reinstated. But behind their ensuing self-congratulation lies the cold, clear message that long-dormant governing boards are beginning to assert their authority in the face of financial challenges and what many see as a too-slow pace of necessary change. And that raises a fundamental question: who is in charge of America's universities?

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"To me, this is a beautiful example of the ambiguity over governance," says Richard Vedder, director of the Center for College Affordability and Productivity, an independent, not-for-profit research centre in Washington DC. "Who runs universities? Who are the bosses?"

This issue is exercising the US academy not only because of the University of Virginia controversy. There have been disputes in Texas, Iowa, Oregon, Louisiana, North Carolina and elsewhere as governing boards have clashed with both university leaders and academics.

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The Virginia fiasco, which was the most high-profile battle yet, exposed the cultural divide between scholars and university governing boards, which, as some academics saw it, suddenly had the audacity to wish to govern.

Protesting against Sullivan's treatment, 33 departmental chairs and programme directors wrote in a letter to the board of visitors: "We understand the board's fiduciary responsibilities and believe they can be performed most effectively for the mission of the university in conversation with the faculty - the stewards of that mission of higher education. Faculty are the leaders of the university's intellectual and pedagogical life."

Yet the board of visitors' complaints were largely not about intellectual or pedagogical matters. They were about the kinds of practical problems that are intensifying in higher education everywhere, such as how to allocate shrinking resources, increase efficiency and improve results.

"It's impossible to draw bright lines where one constituent's authority stops and the other's resumes," argues Robert Kreiser, associate secretary of the American Association of University Professors. Academic faculty should naturally have control over curriculum and matters of academic personnel and education, he says, "but if a decision is going to be made (by the board) to build an athletic arena instead of a library, for example, that means there should be faculty involvement".

Rubber-stampers snap to attention

Known variously as boards of visitors, trustees, regents or supervisors, the governing panels of private universities are self-perpetuating or elected by alumni. Those at their public counterparts are generally appointed by state governors and, occasionally, legislatures as the custodians of private contributions and taxpayer money channelled to the universities.

Boards can include proven fund-raisers, prominent alumni, business executives and political supporters of the people who appoint them, among others. Half are businesspeople, 25 per cent are professionals and 16 per cent are working or retired educators, according to a survey of 195 universities and colleges conducted in 2010 and released in 2011 by the Association of Governing Boards of Universities and Colleges (AGB).

Like some corporate boards of directors, many university governing boards have traditionally rubber-stamped the few things presidents have asked of them, Vedder says.

"The boards in higher education have been more nominal than real," he adds.

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"They meet only a few times a year and their terms are limited, so most of the board members are relatively inexperienced. All these things work toward a system where in fact the boards have nominal authority that provides cover to validate all of this outside money that's coming in."

Only half of all governing boards conduct comprehensive job reviews of the presidents of their institutions every three to five years, as recommended by the AGB, which has also pushed for non-partisan screening committees to vet candidates for boards of regents just as nominating panels do for judges.

"You could look at the faults of corporate boards and the faults of boards of public universities in a similar light," suggests Richard Novak, the association's senior vice-president for programmes and research. "Too often we see public boards in which trustees or regents tend not to feel as independent as they should, too beholden to the governing authority - the governor or legislature - or too identified with the university administration."

Nearly a third of public university boards of regents or trustees receive no financial training, and more than a quarter admit that they do not undertake much budgetary or financial oversight, according to a survey by the AGB. The numbers are even worse at private universities.

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"When the boards get uppity and question the administration of the CEO, people inside higher education get very, very agitated," Vedder says.

"They are concerned about outsiders making the decisions. In some cases, that makes sense. You don't want to have to take everything to the board. But when a board does start taking it seriously and taking an interest in the university, all hell can break loose."

That is what happened when the University of Texas board of regents reportedly considered firing the president in May in a dispute over raising tuition fees. A campus uproar resulted and the president kept his job, but the board has continued to push for cuts in administrative costs and changes in the way that academic faculty are evaluated.

Texas A&M University has been embroiled in controversy since 2009 after the board began a push to base academics' pay rises on student evaluations. Boards in other states have also started to impose themselves in financial decisions. The board of supervisors of the Louisiana State University System voted in May to dismiss the system's president, John Lombardi, who is said to have alienated some state legislators.

There are better ways to resolve conflicts between boards and campus interests, Novak says.

"The formal way is to work through the faculty senate, although that can sometimes be [as slow as] molasses. At the same time there are a lot of enlightened faculty who realise the need for change. So [it's positive] if there's a way to work with the blue-chip faculty, in the senate or elsewhere; these people are bright, they've got an awareness of a need for change and for innovation. There's got to be a way to engage the faculty in the conversations."

Who holds the purse strings?

The source of disagreement between the two groups lies in more than just a cultural divide. Academics and administrators point out that governing boards are trying to take more control of their public universities at the very time that states are giving them less money.

"The board is supposed to represent the broader public interest, and the insiders downplay that and view it as 'our university'," Vedder says.

Protests both on and off campus, including a 50-0 vote of no confidence in the move by the faculty senate, were the driving force behind the stunning reversal of the Virginia board's decision to dismiss Sullivan.

When the president was reinstated at a public meeting on 26 June, she emerged to join supporters in singing the university's 1893 alma mater, The Good Ole Song.

"It was a shining moment for the faculty," says the AAUP's Kreiser.

But in an indication that tensions are likely to remain, within days the governor of Virginia had reappointed Dragas as chair of the board of visitors.

More battles loom. "We expect governance and leadership clashes to increase in coming years as the sector's ability to grow revenues dwindles, and its emphasis shifts to new operating efficiencies and cost containment," the credit-rating agency Moody's predicts.

Novak says: "If any good comes out of this, it will be a strengthened partnership between presidents and boards, and perhaps a more considered approach to faculty and other interests."

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